Rivian and Lucid on Tuesday reported weaker-than-expected quarterly results and issued cautious full-year outlooks, citing U.S. policy changes and trade restrictions that have disrupted supply chains and increased costs for electric vehicle manufacturers.
Under the administration of U.S. President Donald Trump, the removal of federal EV tax credits, higher tariffs on imported auto parts and the elimination of penalties for failing to meet fuel economy standards have reduced key revenue streams and raised production expenses. China’s curbs on exports of heavy rare earth metals, vital for electric motors, have added further pressure.
See also: Lucid Lowers Annual Output Forecast, Misses Revenue Estimates Amid Tariff Concerns
Rivian said costs per vehicle sold in the June quarter rose about 8% year-on-year to $118,375. “That’s really reflecting a much lower production volume, which was largely driven because of challenges we had within our supply base as a result of a lot of the changes in policy,” CEO RJ Scaringe told Reuters, adding that the company’s bill of materials had not grown. Lower output resulted in a $14,000 increase in cost of goods sold per vehicle, CFO Claire McDonough told analysts.
The company will halt production for three weeks in September to integrate components and prepare for the launch of its smaller and less expensive R2 SUV next year, which it views as key to long-term growth. Rivian now expects an adjusted core loss of $2 billion to $2.25 billion for 2025, up from an earlier forecast of $1.7 billion to $1.9 billion, as revenue from regulatory credit sales is projected to fall to about half of the $300 million it previously estimated. Gross profit for the year is now expected to be roughly break-even, compared with earlier guidance of a modest surplus.
See also: Rivian Reports Lower Q2 Production but Stronger Deliveries as R2 Prepares for Launch
Lucid, which avoided most of the rare earth shortages by relying on existing magnet inventory, said tariffs eroded its second-quarter profit margins. The company trimmed its annual production forecast and warned of softer demand in the fourth quarter once the $7,500 federal EV tax credit expires at the end of September. “We’re definitely expecting that there is some softening in demand,” interim CEO Marc Winterhoff told Reuters, adding that measures are being planned to offset the loss of incentives.
