Love for Rivian Vehicles May Not Be Enough to Sustain the Automaker
Rivian is one of the most exciting new automakers in recent memory. Of course, the Rivian R1T and the R1S are among the best all-electric vehicles. Not only do they offer dynamic performance, but these are well-rounded vehicles. The problem is that Rivian has struggled significantly despite people loving its options. Rivian has less expensive vehicles coming in 2026, but if this trend continues, that might be too late.
Rivian vehicles are experiencing troubles
There have been several reports of financial hardship for Rivian. Recently, the automaker laid off about 10% of its staff due to sagging sales. According to SFGATE, this is the third major layoff for the company since 2022. For context, the company was founded in 2009 and became the first automaker to deliver an all-electric pickup truck in 2021 with the Rivian R1T. The company went public in November of that year.
Despite people loving Rivian models and considering them among the best all-electric vehicles, sales have been declining significantly. In fact, Rivian reported a 1.52 billion net loss in December of 2023. The company’s stock also took a 22% tumble on February 22. Unfortunately, this comes as the automaker produced a record number of vehicles as it anticipated higher demand.
Rivian sold about 9,900 units of the R1T in 2022 and 19,410 in 2023. Regarding the R1S, 800 people bought the SUV in 2022 and 23,437 did in 2023.
Besides lower sales, Rivian has another big problem. It reportedly loses more than $30,000 from each vehicle sold. This is because Rivian vehicles are so expensive to produce. However, raising prices would mean even fewer potential buyers could afford these rugged all-electric vehicles.
Reasons for the issues
The thing about Rivian is that the demand for its vehicles is mostly there. As the sales figures for both the R1T and the R1S show, these are among the best all-electric vehicles. However, money is the issue as these are expensive vehicles to produce. It seems the automaker’s goal for 2024 is to decrease costs, which explains the recent layoffs.
However, this may not be enough as perhaps Rivian put too much into its vehicles from the start. What makes other new automakers successful is building on vehicles as the years go on and become more popular. This is why the upcoming Rivian R2 and R3 models could be saviors and perhaps should have come before the R1S.
The money issue with Rivian goes twofold. Not only are they expensive to produce, but they are also expensive for the buyer. The Rivian R1S starts at over $70,000, and the R1T has a similar price. This is too expensive for most buyers, and the price is also a bold move for a company with such a short history.
It’s also important to point out that while there’s growth, the demand for even the best all-electric vehicles is slowing. According to predictions, EVs will only make up about 10% of cars on the road when 2024 ends. Hopefully, Rivian can survive and even thrive until the R2 arrives. However, it seems this is an uphill battle, as things have not been going well for the automaker.
