Rivian Adjusts Production Amid Supply Challenges but Eyes Future Growth

Rivian

Electric vehicle (EV) manufacturer Rivian faced production setbacks in 2024 due to parts shortages but managed to exceed revised output expectations and secure new partnerships for future expansions.

Production Dip and Recovery

Rivian reported a 14% decline in its annual EV production, with a total of 49,476 units produced in 2024, down from 57,000 units initially projected at the start of the year. Despite these challenges, which began in the third quarter due to a temporary shortage of components for its Enduro motor system used in the R1 series and commercial van variant, the RCV, the California-based company still surpassed its revised guidance of 47,000 to 49,000 vehicles. The company has since resolved the production constraints and is looking towards future improvements and expansions.

Strategic Developments and Future Outlook

Despite the slowdown, Rivian successfully increased its full-year sales by 2.9%, delivering 51,579 EVs, which falls within its target range of 50,500 to 52,000 for 2024. The company's quarterly output dropped by 27%, but deliveries saw a slight increase of 1.5%.

Looking forward, Rivian is set to close a significant $5 billion joint venture with German automaker Volkswagen in the fourth quarter. This partnership is expected to bolster Rivian’s production capabilities, especially as it prepares for the launch of its new R2 mid-size SUV in 2026. The R2 will feature advanced 4695 cylindrical battery cells from LG Energy Solutions (LGES), sourced from LGES's facility in Queen Creek, Arizona.

Additionally, Rivian has adjusted its assembly plans by relocating the production of the R2 to its Normal, Illinois plant, after halting plans for a new plant in Georgia earlier in the year due to a market slowdown and increased competition. In a move to support this transition, Rivian received interest from the Energy Department for a loan of up to $6.6 billion in late November to restart construction and support future growth.