Money & The Economy

Electric Vehicle Maker Launches Another Round Of Layoffs As Demand Slows

Electric vehicle (EV) manufacturer Rivian announced its second round of layoffs just this year on Wednesday as consumer demand for EVs stalls.

The layoffs at Rivian will affect around 1% of the company’s staff as they continue to look for ways to cut costs to bolster struggling profits due to less-than-expected EV sales, the company confirmed to the Daily Caller News Foundation. Rivian announced in February that it was laying off 10% of its workforce after it released its 2024 production forecast, which was well below analyst expectations, according to Reuters.

“We continue to work to right-size the business and ensure alignment to our priorities,” Rivian told the DCNF. “As a follow-up to some of the changes we made to teams in February, today we shared some additional changes to groups supporting the business. Around 1% of our workforce was affected by this change. 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 previously cut around 6% of its staff in 2023 and another 6% in July 2022, according to Business Insider. The EV maker employed nearly 17,000 people in both North America and Europe at the end of 2023.

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The world’s top EV maker, Tesla, also announced layoffs this week, cutting 10% of its global workforce, which was around 140,473 employees by the end of December. Stellantis announced in March that it would soon lay off 400 employees in engineering, technology and software roles related to EVs.

Both Tesla and Rivian’s production deliveries failed to meet estimates from analysts in the first quarter. Bentley, GM, Ford, Mercedes-Benz and Honda have all backed off of previous EV goals in the past year due to sluggish market demand and prohibitive costs.

The growth in sales of EVs slowed in the first quarter as demand continued to limp, increasing just 2.7% compared to the sale of all new vehicles at 5%, leading to a decline in EV market share from 7.6% to 7.1%. EV sales grew around 47% in the whole of 2023.

The Biden administration has sought to bolster EV companies and consumer adoption, doling out a $7,500 tax credit per EV, contingent on what parts of the vehicle were produced where.

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Will Kessler

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Will Kessler

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