By Zaheer Kachwala
(Reuters) -Rivian slashed its full-year production forecast on Friday and missed third-quarter deliveries expectations due to a parts shortage and slowing growth in electric-vehicle demand, sending shares of the startup down nearly 9%.
The company said the shortage of the part, used in its R1 SUV and R1T pickups as well as its delivery vans, began in the third quarter and has become more acute in recent weeks. Rivian did not identify the part or the supplier for the component.
Amazon (NASDAQ:AMZN).com-backed Rivian now expects full-year production to be between 47,000 and 49,000 vehicles, down from its earlier forecast of 57,000 vehicles. The forecast cut means the company now expects to make fewer vehicles than it did last year.
Slowing growth in electric-vehicle demand has affected the entire industry, as Americans dealing with high interest rates turn to cheaper hybrids. U.S. market leader Tesla (NASDAQ:TSLA) also missed quarterly deliveries estimates earlier this week.
"The cut to its production guidance was substantial and it is likely to raise a variety of questions surrounding RIVN's ability to turn the corner towards generating a gross profit," said Garrett Nelson, senior equity analyst at CFRA Research.
The company said it plans to turn its first profit in the last three months of the year. To aid that effort, Rivian had closed its only manufacturing facility, in Normal, Illinois, for three weeks earlier this year to simplify its manufacturing processes and cut the cost of building its vehicles.
Lowering costs is crucial for Rivian as it looks to weather the demand slowdown and increase production of its R1 models, while gearing up to manufacture its smaller R2 models in 2026.
The company said it handed over 10,018 vehicles in the quarter ended Sept. 30, compared with estimates of 12,078, according to 15 analysts polled by Visible Alpha.
Rivian reaffirmed its annual deliveries forecast of 50,500 to 52,000 vehicles. Analysts were expecting 53,491, according to Visible Alpha.
German automaker Volkswagen (ETR:VOWG_p) said earlier this year it will invest up to $5 billion in Rivian as part of a joint venture which could help it boost its cash reserves and turn cash flow positive.