Rivian Automotive (NASDAQ:RIVN) cut its annual EV production target reportedly due to a miscommunication earlier this year with Atlanta-based supplier Essex Furukawa.
What Happened: Essex Furukawa supplies Rivian with copper windings used in the company's electric vehicle motors. Rivian miscalculated when communicating supply and demand needs with Essex earlier this year, according to a report from Bloomberg, citing people familiar with the matter. Essex subsequently committed to supporting other customers.
Essex was Rivian's sole supplier for copper windings. Though Rivian has now identified other suppliers to provide it with replacements, the cost is high, the report said.
Rivian did not immediately respond to Benzinga's request for comment.
Why It Matters: Rivian cut its annual production forecast last week by as much as 18% to between 47,000 and 49,000 electric vehicles, sending the stock on a downward spiral.
The company cited production disruption owing to a component shortage for the revised guidance. The component, it said, is used in both the company's R1 vehicles and its commercial vans.
"This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues," the company said, without giving more details.
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Photo courtesy: Rivian
