Rivian's Production Challenges and Industry Comparisons

Rivian's production issues highlight its struggles in a competitive EV market, distinct from Tesla's challenges.

### Rivian's Production Challenges: Supplier Issues and Industry Comparisons
* 📉 The initial drop at the market open was **not as severe as anticipated** during the pre-market session.
* ⚠ A significant supplier issue emerged in the third quarter, specifically concerning Rivian's **in-house manufactured enduro electric motor or drive unit**, although the exact nature of the problem remains **unclear**.
* 📊 Rivian's production guidance has been adjusted to **47,000 to 49,000 units**, reflecting an **18% decrease from last year's output**, indicating a **troubling shift for the company**.
* 🚗 Prior to this morning, Rivian had aimed to produce **57,000 units this year** but continues to face **persistent production challenges**.
* 🔍 In contrast, Tesla recently reported **missing its third-quarter delivery targets**, yet its shares are slightly up today, although **down 5% for the week**.
* 🤔 Analysts suggest that Rivian's issues are more indicative of **internal problems** rather than a broader industry challenge, as they lack transparency regarding the **specific supply issues**.
* 💰 Rivian, being a niche player, cannot afford to **incentivize consumers to the same extent as Tesla**, which has been able to **navigate the current higher interest rate environment more effectively**.
* 📈 The situation raises questions about whether Rivian's struggles signify a **larger trend in the electric vehicle market** or if they are **isolated to the company itself**.

The drop at the open is not as bad as it was in the pre-market. At some point in the third quarter, there was a significant supplier issue that got worse. We don't know what that is. We don't know if it relates to a specific part. We just know that it relates to the enduro electric motor or drive unit that Rivian manufactures in-house. It's a really kind of change in the picture for this EV name because if you think about it, the production guidance of 47,000 to 49,000 would actually represent a drop of 18% from what they managed to build last year. This was a company that was kind of on the up a little bit. They're expecting to build prior to this morning 57,000 units this year, and they continue to demonstrate teething problems that they can't get past. And of course, Mary, this together with what we learned from Tesla earlier in the week, of course, missing its target.

when it comes to third quarter deliveries. You actually have Tesla shares up a little bit right now, but actually down 5% for the week. How do these two stories wrap together? Oh, well, in Rivian's case, I think it's not an industry problem. I think it's a Rivian problem. They're not being that open or transparent or detailed on what's actually going on with this specific part or where the issue is stemming from. You know, Tesla, we're not prescriptive on their. I go back to the granular detail that we discussed on this program, which is that three and why which are the volume models that Tesla makes came in above sell-side expectations. That other bucket which includes Cybertruck X and X and S came in below expectations. Both names Rivian, which is a niche lower volume player, but Tesla specifically have suffered in a higher

rate environment because it's put a premium on electric vehicles. Tesla has had the level of heavily incentivizing consumers that Rivian doesn't have the luxury of doing. It burns too much cash, can't do it. So it will be interesting to see if there is a big picture industry theme here. But I think Rivian's problems are the right.

Rivian Slashes Production Targets

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Rivian's Production Challenges and Impact

Rivian's stock drop at the open was not as severe as in the pre-market, but a significant supplier issue in the third quarter has worsened, affecting the production of their in-house manufactured electric motor and drive unit.

The company's production guidance has been revised down to 47,000-49,000 units, representing an 18% drop from the previous year's output.

While Rivian's challenges are seen as specific to the company, Tesla has also faced delivery target misses, with both companies struggling to overcome production issues.

Rivian's Challenges in the Electric Vehicle Market

Rivian is struggling to compete with Tesla due to its lack of financial luxury to heavily incentivize consumers.

The company's cash burn is a significant issue, hindering its ability to offer similar incentives.

There may be a larger industry theme at play, but Rivian's problems seem to be unique to its situation.