Elon Musk reportedly thinks that the financial future of Rivian Automotive, Inc. (RIVN) looks bleak after the electric vehicle (EV) manufacturer published disappointing Q4 and fiscal year results on Wednesday, 21 February 2024. After releasing the quarterly financials, Rivian announced that it will cut about 10% of its workforce.
Elon Musk predicts bankruptcy for Rivian if drastic changes are not made
The Tesla founder and CEO took to X soon after this announcement and indicated that he is not surprised about Rivian’s performance and ensuing layoff action. Musk also said that, should Rivian continue on its current trajectory, the company would become insolvent in another six quarters.
He commented:
Maybe that trajectory will change, but so far it hasn’t. They need to cut costs massively and the exec team needs to live in the factory or they will die.
Although Rivian’s financial performance reflected 167% year-on-year revenue growth in tandem with a 75% increase in manufacturing and deliveries, the complete picture does not look good. Actual number crunching reveals a slight rise in production and a 10% fall in deliveries.
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For 2024, the company is likely to manufacture 57,000 vehicles, which is more or less on par with its 2022 production rate. It seems that Musk’s doom-laden prophecies are taking shape, as he already said back in June 2022 that Rivian should look at serious cost cuts to keep the boat afloat.
Both Tesla and Rivian indicated high-interest rates are hamstringing the EV market. RIVN shares ended Friday, 23 February trading on a 12.05% low.
