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The falling EV prices were kicked off by cuts made recently by Elon Musk-led Tesla and Ford Motor Co . The price cuts by Tesla Inc (NASDAQ:TSLA) and Ford Motor Company (NYSE:F) are expected to hurt EV upstarts such as Rivian, Lucid Group Inc (NASDAQ:LCID) and British startup Arrival (NASDAQ:ARVL), which Monday said it would lay off half its staff.
Rivian is focusing resources on ramping up vehicle production and reaching profitability, Chief Executive R.J. Scaringe said in an email to employees on Wednesday announcing the job cuts.
Despite a blockbuster IPO in November 2021, Rivian’s shares have fallen nearly 90% from their peak that month to Tuesday’s close.
“We must focus our resources on ramp and our path to profitability,” Scaringe said in the email, in which he apologized to employees for the necessity of the cuts.
Irvine, California-based Rivian, which has about 14,000 employees, will let go of about 840 staff in a move that will not affect manufacturing operations at its plant in Normal, Ill.
To further conserve cash, Rivian late last year canceled plans to build delivery vans in Europe with Mercedes. Earlier Rivian pushed back the planned launch of a smaller R2 vehicle by a year to 2026.
Last July, Rivian laid off staff and suspended some programs as part of a broader restructuring. As of Sept. 30, 2022, the automaker reported having $13.27 billion in cash and cash equivalents, down from over $18 billion a year earlier.
Shares of RIVN are down 5.13% in mid-day trading on Wednesday.
By Michael Elkins | Michael.Elkins@streetinsider.com
