EV company makes harsh decision amid new launch todayheadline

With the rising number of electric vehicles on the road, owning a gasoline-powered car might eventually seem almost vintage.

Electric vehicles have quickly become a significant part of the automobile industry, and many car companies are trying to enter the market by developing their own.   

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Halfway into 2025, well-known brands like Audi, Cadillac, Chevrolet, Dodge, and Kia have all launched new electric vehicles, and Tesla  (TSLA)  rolled out its highly anticipated robotaxi service to a select group of riders in Austin, Texas.

Related: Tesla unveils an unusual innovation to win back customers

The electric vehicle industry continues to grow, with global sales exceeding the expected $17 million in 2024, accounting for over 20% of total car sales.

While global sales continue to increase, financial challenges can lead even the most profitable companies to make some harsh decisions for the sake of the business.

Rivian exceeds growth expectations

Founded in 2009 as Mainstream Motors, Rivian is an American electric vehicle manufacturer and technology company.

However, like any other emerging business, making profits takes time, and the cost of producing electric vehicles is high. 

Although it boasted continued financial progress, the company didn’t achieve profitability until the fourth quarter of fiscal 2024, largely due to cuts in production costs. 

Since then, Rivian  (RIVN)  has taken multiple steps to build on this success.

Related: Struggling car company swiftly shuts down half its stores

In the first quarter of fiscal 2025, Rivian achieved a gross profit of $206 million, marking its second consecutive positive quarter. 

The EV maker also received a $1 billion investment from Volkswagen Group as part of last year’s $5.8 billion joint venture, Rivian and VW Group Technologies, LLC.

However, despite delivering good results, production costs continue to increase, especially as the company navigates an uncertain economy and looming U.S. tariffs. 

This has led Rivian to make a harsh decision that may have come as a surprise to some. 

Rivian cuts its workforce amid a major launch

Rivian revealed it has laid off around 140 employees from its manufacturing division, representing around 1% of its total workforce.

The downsizing comes when the company is only months away from launching its new R2 SUV in 2026, a new electric five-seat SUV that’s a more compact and far more affordable alternative.

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The layoffs began on June 25, and those affected were told that the company’s  decision to cut manufacturing salaried positions was made to improve its operational efficiency ahead of the R2 launch. 

However, this is not the first time Rivian has made serious cuts within its workforce. 

The company did two rounds of layoffs last year, cutting around 10% of its salaried employees in February and 1% in April.

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