RIVN plunges on flat production growth in 2024

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  • Rivian reported Q4 results after the close on Wednesday.
  • Rivian stock traded lower on Tuesday a day before quarterly results.
  • Wall Street expected revenue to rise 90% YoY for the quarter ending in December.
  • Albemarle executive guides lithium demand lower with 2030 estimate.

UPDATE: Rivian stock sank more than 13% to $13.40 a share afterhours on Wednesday after the electric automaker posted a bigger loss than expected. Rivian lost $1.73 in adjusted EPS, 41 cents below the Wall Street consensus. Revenue of $1.32 billion rose 99% from a year earlier and beat consensus by $60 million. Management said it plans to produce 57,000 vehicles in 2024, showing no growth whatsoever from 2023 levels.

Rivian (RIVN) stock is down 3% on Wednesday ahead of fourth-quarter results that arrive after the close. RIVN stock closed 2.5% lower on Tuesday as well. The market is worried about both Fed Minutes from the January meeting, which get released at 14:00 EST, and Nvidia (NVDA) earnings after the close.

The Presidents’ Day shortened week got off to a rough start on Tuesday after a major lithium producer cut its long-term outlook on lithium demand due to slowing EV production from automakers.

Wednesday sees stocks trending lower as Palo Alto Networks (PANW), SolarEdge Technologies (SEDG), Teladoc (TDOC), Zscaler (ZS) and Crowdstrike (CRWD) all sold off by double-digit percentages on earnings and guidance related turmoil. The tech-heavy NASDAQ Composite is down 0.8% at the time of writing.

Rivian earnings news: EV demand uncertain as transition slows

Albemarle (ABL) executive Eric Norris told The Financial Times on Tuesday that lithium demand is slowing as automakers have cut back their timelines for transitioning to EVs. Norris cut his guidance for global lithium carbonate equivalent demand from 3.7 million metric tonnes to 3.3 million tonnes by 2023. 

This news sent industry leader Tesla (TSLA) down more than 3% lower on Tuesday. Lithium prices are already down 80% since the start of 2023 due to reduced demand from automakers and expanding supply, and Norris said current price dynamics were “unsustainable”.

The timing is bad since Rivian is set to release its fourth-quarter earnings on Wednesday after the close. Wall Street analysts expect Rivian to post $-1.32 in adjusted earnings per share losses. This is a 24% improvement from the quarter a year ago. 

For revenue, Wall Street projects sales of $1.26 billion, up 90% YoY. Rivian’s track record shows a much better performance toward beating earnings consensus compared to revenue consensus since going public a little over two years ago. 

In the fourth quarter, Rivian already announced that it produced 17,541 vehicles and delivered 13,972 vehicles. The latter figure arrived slowing below industry forecasts.

EV stocks FAQs

Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.

EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.

We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.

China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.

Rivian stock forecast

The weekly stock chart below shows RIVN stock clinging to a support range that spans $15.35 to $15.85. This structure worked as support in both January and November 2023, as well as resistance in between. 

A miss on the top or bottom line, or especially negative guidance from executives, will send Rivian stock down to April 2023 support surrounding $12.50. Vice versa, a major beat on upbeat guidance will send RIVN stock above the August 2023 support at $19.50. 

Rivian stock remains in a downtrend. The 9-week Simple Moving Average (SMA) has traveled below the 26-week SMA since last November. RIVN stock needs to close above both SMAs and the $20 psychological level to break out of its current malaise.

RIVN weekly stock chart

 

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