By Akash Sriram, Abhirup Roy and Zaheer Kachwala
(Reuters) -Rivian and Lucid posted disappointing quarterly earnings on Tuesday and provided a grim outlook for the year as the electric vehicle makers take a hit from policy shifts and trade tensions that have disrupted the industry.
Shares of Rivian fell about 4% after the bell, while Lucid shares dropped 7%.
EV makers are navigating a bumpy road under U.S. President Donald Trump’s administration, which has decided to take away consumer tax credits, impose high tariffs on imports of auto parts and remove emission fines for makers of gas vehicles.
Add to that, China’s curbs on the export of heavy rare earth metals – essential components for motors – have disrupted supply chains and affected production in the U.S.
Rivian flagged higher costs in the June quarter, hit by disruptions to rare earth supply, and increased its adjusted core loss forecast for the year as income from the sale of regulatory credits dries up.
Its cost of revenue for each vehicle produced rose about 8% to $118,375 per unit sold from a year earlier, according to Reuters calculations.
“That’s really reflecting a much lower production volume, which was largely driven because of challenges we had within our supply base as a result of a lot of the changes in policy,” CEO RJ Scaringe told Reuters.
“Therefore, our costs look higher, but it’s not as if our bill of materials grew or as if we became operationally less efficient.”
Lower production in the June-quarter led to a $14,000 impact per vehicle sold to cost of good sold, CFO Claire McDonough said in a call with analysts.
The company will shut down production for three weeks in September, after a one-week pause in the second quarter, to integrate components and prepare for the launch of its smaller and cheaper R2 SUV next year that is seen as crucial to its success.
While Lucid said it managed to largely avoid the rare earth supply disruption by using some magnets from its inventory, its profit margin was hurt by tariff-related costs in the second quarter.
The luxury EV maker cut its annual production forecast.
The $7,500 federal EV tax credit expires at the end of September, eliminating a key competitive advantage that has driven demand, but analysts anticipate a surge in third-quarter sales as customers rush to make purchases before losing access to the incentive.
“We’re definitely expecting that there is some softening in demand (in the fourth quarter),” Lucid’s interim CEO Marc Winterhoff told Reuters. The company has planned countermeasures to make it “palatable” for consumers, he said, without disclosing details.
