Raven is shedding hundreds amid a slowdown in EV demand

Electric truck and SUV company Raven will lay off hundreds of employees in an effort to save cash as part of federal support for electric vehicle adoption under the Trump administration.

The layoffs come less than a month after the end of a federal tax credit that once saved most buyers $7,500 on new electric vehicles and $4,000 on used ones. Experts said sales would decline without the credit, which expires on September 30.

Irvine-based Raven plans to lay off more than 600 workers, a company spokesman confirmed, or about 4.5% of its workforce. The company had just 15,000 employees at the end of last year.

“We have made the very difficult decision to make a number of structural adjustments within our teams,” CEO RJ Schering wrote in a memo to employees Thursday. “With the changing operating landscape, we need to rethink how we measure go-to-market activities.”

Raven wasn’t the only tech company to announce layoffs this week, with Meta laying off 600 employees in its artificial intelligence division on Wednesday in an effort to streamline operations and reduce sweat. Meta has renewed its approach to AI in recent months as it competes with OpenAI and Google.

Last month, Raven had a small round of layoffs that affected about 200 employees, or 1.5% of the workforce.

iSeeCars.com analyst Carl Brewer said demand for electric cars has stagnated as the market saturates and cars become harder to buy.

President Trump’s rollback of Biden-era EV incentives, as well as recent auto tariffs that make cars and parts more expensive, are contributing to the slowdown.

Raven reported a 32% increase in vehicle sales to 13,201 in the third quarter, but lowered its sales forecast for the full year. The company now expects to deliver between 41,500 and 43,500 vehicles in 2025, down from 46,000.

Brauer said the layoffs are a sign of trouble in the industry, especially for companies like Raven and Tesla that produce only electric cars and don’t have gas-powered alternatives.

“Electric vehicle production will be reduced by every company due to reduced demand,” Brauer said. “Purely for EV manufacturers, they probably already feel that.”

EV sales in California in 2024 were flat compared to previous years, the Times reported, raising questions about whether automakers can meet the state’s lofty mandate to sell zero-emission vehicles.

To increase sales, Rivian is preparing to launch a new, more affordable model that is expected to start at $45,000. The company’s current cheapest model is the R1T pickup, priced at around $71,000. This price point is out of reach for many consumers, especially with the loss of the federal tax credit.

Tesla, the electric car giant run by Elon Musk, released lower-priced versions of its Model 3 and Model Y cars earlier this month. However, the launch did not impress investors, and analysts said that the new prices were not low enough to lead to increased buying.

The new Model 3 Standard starts at $36,990, $5,500 less expensive than the current version of the car. The Model Y Standard starts at $39,990, $5,000 less than its pricier rival.

Tesla stock remained steady after the company reported its third-quarter earnings earlier this week. The company saw a 6% year-over-year increase in total vehicle revenue.

Still, Tesla’s numbers missed analysts’ estimates, and Musk has yet to deliver on his long-promised robotics venture. Raven reports its earnings on November 4.

Following news of the impending layoffs, Raven’s stock was up more than 1% in Thursday’s trading. Its shares have shown little change so far this year, while the tech-heavy Nasdaq Composite Index has risen more than 15% over the same period.

Rivian and other EV makers benefited from a temporary boost in sales before the tax credit expired, as buyers rushed to get the discount while it was still available.

National sales of new EVs rose 19% in July last year, Cox Automotive said, and sales in Orange County were up 7% in July from last year.

Now that credit has been eroded, sales declines could be severe, Brewer warned. Raven may get a boost when it releases its cheaper model, but the company needs to maintain funds in the meantime.

“Raven acknowledges this, and they’re restructuring their production plans and their cost structure as a result,” Brewer said. “That’s why they turn people away.”