Why Rivian Stock Dropped Over 25% Last Month
Investors don't expect electric vehicle (EV) start-ups to be profitable for several years after commercial production begins. One key to profitability is manufacturing at volumes that will cover fixed costs. So when EV maker Rivian Automotive (NASDAQ: RIVN) told investors in its March report for fourth-quarter 2021 results that it was reducing production guidance, investors fled. Over the full month of March, Rivian stock dropped 25.6%, according to data provided by S&P Global Market Intelligence.
That plunge has continued so far in April, with Rivian shares now down more than 40% since the beginning of March.
Though the company said it has capacity to produce as many as 50,000 of its electric vehicles this year, it said in its shareholder letter on March 10 that it only expects to make 25,000 due mainly to supply chain issues.
Source Fool.com
