Rivian (RIVN), a U.S.-based electric vehicle maker, is laying off a small number of workers as it looks to lower costs before the launch of its next SUV, according to the Wall Street Journal report. The cuts will affect less than 1.5% of its 15,000 employees. Most of the changes are in the commercial team, which manages sales and service. Rivian noted that affected staff can apply for other jobs inside the company.
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The move highlights Rivian’s efforts to streamline operations and lower expenses while keeping focus on the R2 SUV, which will be its lowest-priced vehicle so far.
EV Industry Faces Pressure
The layoffs come as U.S. automakers face big policy changes. A $7,500 federal tax credit for EV buyers ends later this month, forcing several carmakers to slow production. Rivian and other EV-only firms are also being hurt by new rules on fuel economy fines. The company recently said these changes could delay about $100 million in revenue from credit sales to other automakers.
This shift has already hit others in the sector. General Motors (GM) cut 360 jobs at a Detroit plant, and Volkswagen (VWAGY) is slowing ID.4 SUV output in Tennessee, with 160 workers placed on temporary leave.
The R2 SUV Could Be a Turning Point
Rivian went public in 2021 but has been under pressure to cut losses. The company lost $1.1 billion in Q2, though it says it has enough cash to fund the launch of the R2. Priced at about $45,000, the new SUV is far cheaper than its R1T pickup ($70,990) and R1S SUV ($76,900).
The company expects much stronger demand for the R2, which could help it reach more mainstream buyers. Analysts believe success with this model will be key to Rivian’s long-term survival.
Is RIVN Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on RIVN stock based on seven Buys, 13 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average RIVN price target of $13.85 per share implies 1.09% upside potential.
