Ford EV Rival Rivian Reduces Workforce Amid Softening Demand

February 23, 2024 2:05 pm

By now, it’s become a well-known fact that demand for all-electric vehicles in the U.S. has softened over the past few months, prompting many automakers – including Ford – to scale back their ambitions in that regard. In fact, Ford recently chose to delay $12 billion in planned EV investments and perhaps even push back the launch of certain models, which are moves that it can make on the back of a strong ICE and commercial business. However, for all-EV automakers like Rivian, that isn’t really an option, which has now prompted that company to reduce its workforce amid falling demand, according to Reuters.

Rivian revealed that it plans to trim its workforce by around 10 percent on the cusp of lowered production expectations for 2024, which will be accompanied by a weeks-long production shutdown. As a result, Rivian plans to build around 57,000 vehicles this year – roughly the same as 2023 – which is well below analyst estimates of 81,700 units. “There is a host of macro level challenges,” Rivian CEO RJ Scaringe explained, citing high interest rates and geopolitical risks as additional obstacles standing in the company’s way.

Ford sold off most of its stake in Rivian early last year after it was initially one of the company’s largest backers, and since then, the company has laid off a few hundred people – including some executives – as it aims to right the proverbial ship. In spite of its reluctance to cut prices, Rivian is still losing an estimated $33,000 on every EV it sells, too.

However, next month, Rivian will reveal the new R2 crossover – a direct rival to the Ford Mustang Mach-E – which is expected to start out somewhere in the $40,000-$50,000 range, and it will be eligible for the federal clean energy tax credit of $7,500, according to Scaringe. The company is hoping that this new, cheaper model will help it significantly grow its business and expand its customer base, much the way the Tesla Model 3 and Model Y have done for that EV automaker.

We’ll have more on Rivian soon, so be sure and subscribe to Ford Authority for more Rivian news and continuous Ford news coverage.

By Brett Foote

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.