By Akash Sriram and Abhirup Roy
(Reuters) -Electric-pickup maker Rivian (NASDAQ:RIVN) on Tuesday stuck to a 2024 production forecast well below Wall Street targets and reported a wider-than-expected first-quarter loss as it ended a weeks-long manufacturing halt.
Rivian shares fell 6% in after-hours trading as the muted forecast drew questions from some analysts about demand for its pricey R1S SUVs and R1T pickups. High inflation has soured consumer sentiment for electric vehicles, with hybrids gaining sales traction.
Rivian shut down for the start of its second quarter and resumed production of its flagship vehicles late last month. The three-week shutdown allowed it to upgrade its assembly line to reduce costs in the long run.
"We didn't produce for the first month this quarter. We've moved from three shifts to two. That's all balanced by the fact that the lines are running faster," Rivian CEO RJ Scaringe told Reuters. "We are optimistic on the guidance we provided, but we're not updating it."
Rivian said it will make 57,000 vehicles this year, while nine analysts polled by Visible Alpha expected 62,277.
The factory retooling, however, added costs in the first quarter, and the supplier changes might limit the production ramp and rate in the near future, Rivian said.
"We believe it is being cautious," said Garrett Nelson, senior equity analyst at CFRA Research. "We also think there is some uncertainty regarding its sales looking out until later this year, so it is possible that sales can't support a higher production total."
While a broader slowdown in EV demand has forced automakers to slash prices, Rivian has shied away from major discounting. It has instead introduced lower-priced variants with shorter range.
As a result, the average selling price of its vehicles has fallen to $88,607 in the first quarter from $94,123 in the prior quarter.
In March, Rivian revealed its smaller, more affordable R2 SUV aimed at the mass market. Production is due to start in the first half of 2026 at its existing Illinois factory instead of a previously proposed plant in Georgia. That will save the company more than $2 billion in expenses.
On Tuesday, the company cut its annual capital expenditure forecast by $550 million to $1.2 billion. Analysts had expected capital spending of $1.59 billion.
The Amazon (NASDAQ:AMZN).com-backed company has been trimming costs by renegotiating supplier contracts and building some parts, including its drive unit dubbed Enduro, in-house to reduce dependency on vendors.
Revenue for the quarter ended March 31 totaled $1.2 billion, compared with analysts' average estimate of $1.16 billion according to LSEG data.
Rivian's net loss widened to $1.45 billion from $1.35 billion the year-ago quarter, partly due to costs to retool the factory. It posted a loss of $1.24 per share, steeper than the $1.17 per share loss expected by Wall Street according to LSEG data.
Rivian posted cash and cash equivalents of $5.98 billion, compared with $7.86 billion in the fourth quarter.