Rivian Automotive (NASDAQ:RIVN) saw its shares drop over 4% in premarket trading on Wednesday after reporting a bigger-than-anticipated loss for the second quarter, impacted by disruptions in the supply chain linked to trade policy changes.
The electric vehicle maker recorded an adjusted loss of 97 cents per share for the quarter, missing analyst expectations of a 66-cent loss.
Revenue was $1.3 billion, matching consensus estimates.
Production numbers fell sharply to 5,979 vehicles from 13,980 in the previous quarter, as Rivian cited supply chain bottlenecks resulting from shifts in trade regulations.
Additionally, the Trump administration’s rollback of a rule penalizing companies that fail to meet fuel economy standards has reduced demand for regulatory credits. These credits, which Rivian and competitor Lucid (NASDAQ:LCID) sell to traditional automakers to avoid emissions penalties, now generate roughly half of Rivian’s original forecast of $300 million.
The decline in revenue from these credits was a major factor behind the increased loss projection, and Rivian warned that no income from such credits is expected in the second half of the year.
Despite these challenges, the company confirmed its full-year delivery target of 40,000 to 46,000 vehicles but raised its adjusted core loss estimate for the year to between $2.0 billion and $2.25 billion.
Rivian plans to temporarily shut down its Illinois factory for about three weeks in September to increase production capacity to around 215,000 vehicles annually, in preparation for the launch of its more affordable R2 SUV next year.
“The future of Rivian hinges on R2 product success; it could be a company and industry game changer,” noted strategists at Canaccord Genuity in a recent report.
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