How is the electric car industry doing? It depends on how you ask the question and who you ask it of.
Two leading U.S. companies — one a startup turned stalwart, the other still trying to secure itself a foothold in the market — reported their production and sales figures for the final three months of 2023. The behemoth Tesla delivered 484,507, besting expectations, according to Bloomberg. Rivian, the newcomer, delivered 13,972 cars over the same time period, missing estimates by a hair. The stock market response tells the rest of the story: Rivian shares were down around 10% in morning trading Tuesday, while Tesla shares are basically flat.
While the more-than-30-times difference is scale is obvious, the two companies’ numbers serve as snapshots of both the promise and peril of auto electrification as we roll into 2024. EVs are a real business, in which Tesla is a large but no longer dominant player. Elon Musk’s company has slipped into the number two slot behind China’s BYD. Rivian, meanwhile, is not just competing with Tesla to sell electric vehicles in the United States, but also with legacy automakers who have ramped up their electric vehicle businesses to the tune of about 10% of the American car market.
For Tesla, everything now is about scale — how it can pump out as many (increasingly competitively priced) cars to snare the average car buyer’s dollar. Rivian is at a different stage of its evolution, more reminiscent of the Tesla of more than a decade ago. The company still loses a staggering amount of money on every car it sells (although that figure is narrowing) and competes in a defined sector that Tesla has notably declined to directly play in: full-size luxury trucks and SUVs. And on another worrying note, while Rivian’s full-year production numbers came in more than 3,000 vehicles over its own guidance, its fourth quarter deliveries were short of the third quarter’s 15,564 deliveries.
While the challenge for Tesla is to sell as many cars as it can, the challenge for Rivian is to navigate the most dangerous part of a new car company’s growth — not the early days of using investor money to develop a new vehicle, but the next stage, where you have an actual car to sell but you have to figure out a way to make money doing it.
Editor’s note: This article has been updated to correct the difference in scale between Tesla and Rivian deliveries. We regret the error.
