Shares of electric-vehicle (EV) maker Rivian (NASDAQ: RIVN) were falling again last month as pressure continued to build on the EV sector.
A combination of further price cuts from other EV manufacturers, falling expectations that the Federal Reserve would cut interest rates, and weak deliveries and financial results from industry leader Tesla all weighed on the stock. The company also announced another round of layoffs as it cuts costs with growth slowing.
According to data from S&P Global Market Intelligence, the stock finished the month down 19%. Those losses came primarily in the first half of the month.
Rivian heads downhill
Rivian started off April heading lower after the company reported delivery numbers that were in line with guidance and reaffirmed its guidance for production of 57,000 vehicles for the year.
Rivian said it delivered 13,588 vehicles in the first quarter, but investors may have been hoping for an increase in guidance.
Separately, Tesla reported a 9% decline in its first-quarter earnings report, showing weakness in the broader EV sector.
The second week of April was the company’s worst of the month. Ford Motor said it was cutting the price of the F-150 Lightning EV, stepping up the price competition with Rivian as those two companies are arguably the highest-profile EV pickup manufacturers on the market right now.
Moreover, the March Consumer Price Index, which came out on April 10, showed inflation rising again, cooling off hopes that the Federal Reserve would lower interest rates later this year. High interest rates have tamped down demand for expensive cars by raising interest rates, and lower interest rates were expected to provide some relief for high-end carmakers like Rivian.
On April 17, the company said that it would lay off 1% of its workforce, taking another step on a long road to chipping away at its large losses.
What’s next for Rivian
Investors will be getting a big update from Rivian after hours on Tuesday, when it delivers its full first-quarter earnings report.
Better-than-expected results can help drive a rebound in the stock, but larger questions loom for the company as its production growth slows and the EV sector seems to be plateauing.
Analysts are expecting to see revenue jump 76% to $1.16 billion and a per-share loss of $1.17, compared with $1.25 in the quarter a year ago. It may take more than a simple beat to drive the stock higher, as investors will hope to see progress toward gross profitability.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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