- Rivian cut 1.5 percent of its workforce, mainly in sales and service departments.
- It faces a projected $100M revenue hit from changes in credit and policy rules.
- Legacy companies no longer need to buy compliance credits from EV makers.
For as good as the Rivian R1T and R1S are, they do not sell at the volumes needed to ensure the brand can be profitable. This is why it is venturing downmarket, gearing up to release a more affordable model range known as the R2. And in preparation for its launch, Rivian is looking to slash costs, which means making layoffs.
Rivian confirmed that it recently cut about 225 jobs, roughly 1.5 percent of its 15,000 employees. The reductions targeted its commercial division, which oversees sales and service operations, and affected staff in both the United States and Canada.
Read: Rivian’s Secret Plans Might Include A Lot More Than Just The R2 And R3
Speaking with The Wall Street Journal, a company spokesperson confirmed that employees who were let go are being encouraged to apply for other open positions.
The Trump Effect
While the arrival of Donald Trump to the White House for his second term has been good news for some car manufacturers, including Stellantis with its gas-guzzling Dodge and Ram brands, things are proving to be more difficult for EV makers like Rivian.
As the US administration has eliminated fines for violations of the Corporate Average Fuel Economy rules, Rivian will no longer need to sell compliance credits to other automakers that would have fallen foul of these rules.
According to Rivian, this alone will cost it an estimated $100 million in revenue. That’s money that could have come in very handy in launching the R2, as well as other future models like the R3, R4, and R5.
Industry Pullback
Rivian is not the only EV maker recalibrating under the new landscape. Several other car companies have also been preparing to reduce production of their EVs, given that the federal EV tax credit will end on September 30. In Detroit, GM has temporarily laid off roughly 360 employees for a month to reduce GMC Hummer EV and Cadillac Escalade IQ production.
