Rivian miscommunication with supplier affected 2024 production forecast: report
A recent report rom Bloomberg News has provided some context behind Rivian’s decision to cut its vehicle production estimate for FY 2024. In its Q3 2024 vehicle prediction and delivery report, Rivian adjusted its production forecast by as much as 18% to between 47,000 to 49,000 units this year.
Rivian explained its adjusted production forecast as follows:
“Rivian is experiencing a production disruption due to a shortage of a shared component on the R1 and RCV platforms. This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues. As a result of the supply shortage, Rivian is revising its annual production guidance to be between 47,000 and 49,000 vehicles.”
Citing people reportedly familiar with the matter, Bloomberg News claimed that Rivian’s reduced production forecast was caused by a miscommunication with one of the company’s suppliers, Essex Furukawa, earlier this year. The miscommunication reportedly resulted in Rivian lacking access to copper windings, a crucial component of the company’s in-house electric motors.
Essex Furukawa’s copper windings are reportedly used in all of Rivian’s electric vehicles, from the R1T and R1S to the EDV. As per Bloomberg News’ sources, Rivian miscalculated when it communicated its supply and demand needs with the supplier. As a result, Essex Furukawa reportedly committed its resources to support its other customers.
Rivian has reportedly identified other suppliers for copper windings, but their costs have proven high considering the electric vehicle maker’s short notice. Amidst these circumstances, the publication's sources noted that Rivian ultimately decided to cut its production forecast for the year.
Rivian is still producing vehicles at low volumes, so it was not surprising for the electric truck maker to rely on a single supplier for its vehicle components. As Rivian grows into a mainstream automaker with the R2 crossover and the R3/R3X, the company would likely opt for multiple suppliers to acquire key components of its vehicles.
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