Electric-only automakers are going through it right now. Tesla recently laid off 10,000 workers after posting disappointing first-quarter sales numbers, and now Rivian is slashing another one percent of its workforce after layoffs earlier this year.
A company rep told Automotive News, “We continue to work to right-size the business and ensure alignment to our priorities. This was a difficult decision, but a necessary one to support our goal to be gross margin positive by the end of the year. Rivian’s first 2024 layoff cut about ten percent of its salaried staff.
The automaker has cited rising interest rates and economic challenges as barriers to its growth. Demand for high-priced EVs is also slowing as the market moves past eager early adopters to mainstream buyers who are less willing to pay a premium to have the latest and greatest.
Rivian’s two current models are far from what anyone would consider affordable, but its next-generation R2 and R3 promise more reasonable prices. That said, we’re still more than a year away from those models going on sale, and the company needs to stay afloat until then.
Almost all automakers have struggled with EV profitability, as even Ford has reported severe losses from its electric vehicle business. That problem is compounded for electric-only companies like Rivian and Tesla, where there are no hybrids or gas-only vehicles to bring home the bacon while they figure out how to move EVs. Rivian has a compelling product offering, but it has proven difficult for it to gain a foothold in a market dominated by Tesla and more established automakers.
[Image: Rivian]
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