Rivian Is Laying Off Workers. The EV Pain Is Coming.

A Rivian R1T electric pickup truck. (Mario Tama/Getty Images)

The electric-vehicle start-up Rivian is laying off workers, according to a report. It is a sign of just how difficult the EV business is about to get.

Thursday afternoon, The Wall Street Journal reported Rivian was laying off about 1.5% of its workforce to help reduce costs ahead of the launch of Rivian’s next-generation, lower-cost EV platform, called R2. The company ended 2024 with 14,861 workers.

Rivian didn’t respond to a request for comment, but told the Journal, “We have made some recent changes to the commercial team as part of an ongoing effort to improve operational efficiency for R2.”

Controlling costs is going to become increasingly important for EV makers, especially ones like Rivian that do most of their business in the U.S. The $7,500 federal purchase tax credit is going away at the end of September, effectively raising the price of an average EV by 15%. (The average price for an EV, before the credit, is about $56,000, according to Cox Automotive.)

What is more, Rivian is losing its ability to sell zero-emission vehicle credits because of changes in federal environmental policy.

The changes come amid rising competition and weak profits for the sector. VinFast Chairwoman Madame Thuy told Barron’s on Thursday it is “hard to make money in EVs” right now. The Vietnamese EV start-up reported a second-quarter operating loss of $524 million.

Chinese-backed EV start-up Polestar recently issued a so-called going concern warning, casting doubt on its ability to continue to operate in its current form, while reporting a second-quarter gross profit margin of negative 97.2%.

Rivian doesn’t generate positive gross profits yet either. Wall Street sees positive gross profits in 2026, as sales jump from roughly 40,000 units to 70,000 units, boosted by new R2 models. But profits will be harder to come by if EV prices need to fall to offset the lost credit.

Even Tesla has struggled. The company reported a first-half 2025 operating profit of $1.3 billion, down from $2.8 billion in the first half of 2024. CEO Elon Musk warned of “rough quarters” ahead on Tesla’s second-quarter earnings conference call.

Rivian is preparing for those rough times. Other EV makers will probably follow its lead.

Rivian stock was up 4.7% at $14.34 in early trading on Friday, while the S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.1%, respectively. The move comes after shares fell 5.1% on Thursday. The Friday jump leaves shares down about a dime compared with Wednesday’s close.

Coming into Friday trading, Rivian stock was up about 3% over the past 12 months. Rivian shares peaked at $179.47 in November 2021, shortly after the company’s initial public offering.

Write to Al Root at allen.root@dowjones.com