Why Rivian Automotive Stock Is Sinking Today

Shares of Rivian Automotive (NASDAQ: RIVN) are falling on Friday. The company's stock had lost 3.8% at 12:30 p.m. ET but fell as much as 7.8% earlier in the day. The gain came as the S&P 500 lost 0.7% and the Nasdaq Composite lost 1%.

The electric vehicle maker reported mixed earnings yesterday after the market closed. The stock was also affected by news of a new recall.

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Strong quarter, weak guidance

Rivian's Q4 numbers were solid, including a gross profit -- the company's preferred metric, which accounts for cost of production but excludes other costs -- of $170 million. This is the first time the figure has been positive for Rivian.

The company also posted a smaller-than-expected earnings before interest, taxes, depreciation, and amortization (EBITDA) loss for Q4 of $277 million, a $729 million improvement over Q4 2023.

The problem was 2025 guidance that left investors wanting. The company expects a "modest" gross profit and an EBITDA loss for the full year of $1.7 to $1.9 billion, an improvement over 2024 but less than hoped. The real disappointment came in the company's vehicle delivery forecast of 46,000 units, down from 2024's 51,000 units.

A new recall

On top of the disappointing guidance, investors were greeted with the news that Rivian would need to recall more than 17,000 vehicles. The vehicles in question, the 2025 versions of the company's R1S SUV and R1T pickup trucks, have a problem that leads to a failure of the low beam in cold weather. Rivian will replace the headlights at no cost to customers.

While the company isn't aware of any injuries or fatalities caused by the defect, and it isn't particularly expensive to fix, it will still affect Rivian's bottom line at a time when every dollar counts.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.