The electric truck and SUV company Rivian will lay off hundreds of employees in an attempt to save cash as federal support for electric vehicle adoption wanes under the Trump administration.
The layoffs come less than a month after the expiration of a federal tax credit that once saved many customers $7,500 on new electric vehicles and $4,000 on used ones. Experts said sales will falter without the credit, which ended Sept. 30.
Irvine-based Rivian plans to lay off more than 600 workers, a company spokesperson confirmed, or about 4.5% of its workforce. The company had just under 15,000 employees at the end of last year.
“We have made the very difficult decision to make a number of structural adjustments to our teams,” chief executive RJ Scaringe wrote in a note to employees Thursday. “With the changing operating backdrop, we had to rethink how we are scaling our go-to-market functions.”
Rivian wasn’t the only tech company to announce cuts this week, with Meta laying off 600 employees within its artificial intelligence department on Wednesday in an effort to streamline operations and decrease bloat. Meta has revamped its approach to AI in recent months as it competes with OpenAI and Google.
Last month, Rivian had a smaller round of layoffs that affected around 200 employees, or 1.5% of the workforce.
Demand for electric vehicles is stalling as the market becomes saturated and the vehicles get harder to afford, iSeeCars.com analyst Karl Brauer said.
President Trump’s reversal of Biden-era EV incentives, as well as recent auto tariffs that make cars and parts more expensive, are contributing to the slowdown.
Rivian reported a 32% increase in vehicle sales to 13,201 in the third quarter, but lowered its estimate of sales for the full year. The company now expects to deliver between 41,500 and 43,500 vehicles in 2025, down from 46,000.
Brauer said the layoffs are indicative of troubles in the industry, especially for companies such as Rivian and Tesla that produce only electric vehicles and no gas-powered alternatives.
“Electric vehicle production is going to be cut back by every company due to falling demand,” Brauer said. “For purely EV makers, they’re probably already feeling it.”
EV sales in California in 2024 were flat compared to previous years, The Times reported, raising questions on whether automobile manufacturers can meet ambitious state mandates for zero-emission vehicle sales.
To boost sales, Rivian is preparing to launch a new, more affordable model expected to start at $45,000. The company’s current least expensive model is the R1T pickup, priced around $71,000. That price point is inaccessible for many consumers, particularly with the loss of the federal tax credit.
Tesla, the electric vehicle giant run by Elon Musk, released lower-priced versions of its Model 3 and Model Y vehicles earlier this month. The launch did not impress investors, however, and analysts said the new prices are not low enough to trigger a buying surge.
The new Model 3 Standard starts at $36,990, $5,500 less expensive than the existing version of the car. The Model Y Standard starts at $39,990, $5,000 less than its pricier counterpart.
Tesla’s stock remained stable after the company reported its third-quarter earnings earlier this week. The company saw a 6% year-over-year increase in total automotive revenues.
Still, Tesla’s numbers missed analysts’ estimates, and Musk has yet to deliver on his long-promised robotaxi venture. Rivian reports its earnings on Nov. 4.
Following the news of the upcoming layoffs, Rivian’s stock was up more than 1% in trading on Thursday. Its shares have shown little change so far this year, while the tech-heavy Nasdaq Composite Index rose more than 15% over the same period.
Rivian and other EV makers benefited from a temporary surge in sales ahead of the tax credit’s expiration, as customers rushed to get the discount while it was still available.
National sales of new EVs jumped 19% in July from last year, Cox Automotive said, and sales in Orange County increased 7% in July from the month prior.
Now that the credit has been eliminated, the dropoff in sales could be harsh, Brauer warned. Rivian might get a boost when it releases its cheaper model, but the company needs to conserve funds in the meantime.
“Rivian is acknowledging that, and they’re reconfiguring their production plans and their cost structure as a result,” Brauer said. “That’s why they’re laying people off.”
