From Nasdaq: 2024-11-13 05:15:00

Rivian Automotive has struggled to sell its electric vehicle SUVs at a profit, reflected in its negative gross margin. Despite recent component shortages, the company aims to achieve a positive gross margin next quarter through cost reductions and factory upgrades. Stock down 55% in 2024.

Rivian’s third-quarter revenue dropped 35% due to supply constraints, with a 36% decrease in vehicle deliveries. The company reduced its full-year production guidance and EBITDA outlook. Negative gross margin persists, but Rivian plans to improve with lower costs and increased revenue per vehicle.

Rivian expects to achieve a positive gross margin next quarter, aided by cost reductions and increased revenue. It continues to burn cash with negative cash flows and free cash flow. Partnership with Volkswagen and Amazon may help Rivian’s growth, but profitability remains a long-term goal.

Rivian recently secured a cash infusion from Volkswagen and is working on a joint venture expected to close soon. The company plans to launch a cheaper vehicle and increase commercial van deals with Amazon. While speculative, Rivian shows promise with its strong partnerships and EV technology.

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Read more at Nasdaq: Rivian Appears Ready to Solve Its Biggest Problem. Is the Stock a Buy?