Rivian Automotive (NASDAQ: RIVN), a company that produces electric delivery vans for Amazon, has temporarily halted production. The cause is a shortage of parts.
This move highlights the ongoing supply chain issues that have plagued Rivian and the electric vehicle industry (EV) in recent years.
The production halt raised concerns among investors and contributed to a significant decline in Rivian’s stock price. It is now down by more than 25% since its mid-July peak.
When will Rivian begin production of EDV again?
Rivian has not specified which part is in shortage or identified the supplier responsible for this disruption.
The company did not disclose when the production halt started or when it expected to resume operations.
In a press release, a spokesperson for Rivian stated that the company “expects all missed production to be recovered,” but provided no further details.
The production of Rivian’s other vehicles – the R1S SUV, and R1T pick-up truck – is not affected by the parts shortage.
Rivian manufactures its vehicles in Normal, Illinois. It plans to build a new factory in Georgia.
Despite the recent setbacks, Rivian’s stock is still up more than 60% since its low of $8.40 at mid-April.
Amazon, with a 16% share, is set to receive 100,000 EDVs from Rivian by the end decade.
Amazon’s sales accounted for 19% of Rivian’s total revenue by 2023, making it a crucial partner for the electric vehicle maker.
Amazon has not yet commented on the recent production halt of Rivian.
In April, Rivian temporarily closed its factory to retool and modify, which, the company acknowledged recently, could have a slight impact on deliveries in the current quarter.
Rivian is committed to producing 57,000 cars in 2024. This will allow it to meet its long-term goals.
Is it worth buying Rivian stock at the current low price?
Rivian stock has been volatile, but some analysts think the recent weakness is a good opportunity to buy.
Wall Street has a consensus rating of “overweight” on the EV Company, with an average target price of $18 per share. This suggests a potential 40% increase from current levels.
Rivian’s stock is not attractive to income investors because it does not pay dividends. However, its growth potential on the EV market continues attracting attention.
The ability of the company to navigate supply-chain challenges and meet production targets will determine its future success.
Investors will be watching closely for any updates as Rivian attempts to resolve its parts shortage, and resume production of EDVs for Amazon.
The result of these efforts is likely to play a significant part in shaping the stock performance of the company and its position within the competitive EV sector.
This post Rivian stops production of Amazon electric vans amid parts shortage will be updated as new information becomes available.
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