(Bloomberg) -- Rivian Automotive Inc. fell short of Wall Street’s earnings expectations to start the year as the automaker pursues a costly effort to revamp its manufacturing operations and boost output of electric vehicles.

The company burned through cash and posted an adjusted loss of $1.24 a share for the first quarter, according to a statement Tuesday. That was worse than the average $1.15 deficit in analyst estimates compiled by Bloomberg.

The results “do not appear to materially change the story which we continue to view as challenging,” Ryan Brinkman, an analyst with JP Morgan Securities, said in a note.

The shares pared earlier losses to trade down 3.3% at 11:17 a.m. in New York.

Rivian continues to struggle with production challenges and wavering consumer demand that has wiped out more than half of its stock value this year. The company, the biggest pure-play maker of battery-electric vehicles in the US behind Tesla Inc., aims to take out manufacturing costs and prepare its plant for production of a smaller, more affordable compact sport utility vehicle called the R2.

In a Bloomberg TV interview on Wednesday, Rivian CEO RJ Scaringe said R2 reservations have increased from the 68,000 the company initially disclosed soon after revealing the new model in March. But he declined to provide a more specific number, calling reservations a “false metric.”

Sales were roughly in line with expectations after Rivian last month reported better-than-expected deliveries. The company also stood by its plan to build 57,000 vehicles this year and still sees an adjusted full-year loss before interest, taxes, depreciation and amortization of $2.7 billion.

What Bloomberg Intelligence Says:

“Rivian’s narrowing gross-profit loss per unit in 1Q, driven by cost-efficiency initiatives, may put the carmaker on the right path to a gross profit break-even by 2024. Yet the visibility of the turnaround remains unclear, with the company’s production guidance unchanged, and a sole bet on savings on variable and fixed costs instead of scale.”

— Steve Man, autos analyst

Click here to read the research.

Rivian had warned investors that there would be a planned shutdown of its Normal, Illinois, assembly lines in the current period, to make technology and components upgrades to its consumer cars. Those tweaks will put Rivian on a path to modest gross profit in the final three months of this year, the company reiterated Tuesday.

Key to that effort will be renegotiated supplier contracts that are expected to lower material costs, he said.

“These are not things that we hope will happen. These are contracts that are in place,” Scaringe told Bloomberg TV. 

In March, Rivian surprised investors with a plan to delay a new factory in Georgia and launch the mass-market R2 from its existing facility in Illinois. The company pledged to invest $1.5 billion to expand the Normal plant and secured more than $800 million of incentives from the state.

Rivian, which offers two consumer EVs and a commercial van, is backed by a number of big-name investors, including Amazon.com Inc. But since its 2021 listing, Rivian’s shares have languished and it has struggled to scale its output.

Scaringe hinted that the company could soon expand its commercial business beyond Amazon. Photos of Rivian’s commercial vans bearing the logo of German shipping giant DHL Group have circulated on social media. 

He declined to discuss specifics about its work with the company, but said the vehicles are “hard to hide” and that Rivian has a “number of pilots” in place with potential customers.

The manufacturer has continued to cut jobs this year amid economic turbulence and waning demand for its premium-priced cars.

(Updates shares, adds Rivian CEO comments from fourth paragraph)

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