10:39 AM EST, 11/08/2024 (MT Newswires) -- Rivian Automotive's ( RIVN ) transition to Generation 2 models involves significant supplier changes and the shift has caused unexpected challenges in scaling production, but the carmaker expects to address these over the coming quarters, Wedbush said in a note Friday.

Wedbush said cost efficiencies anticipated from these new materials and supplier contracts should ultimately lead to a 20% reduction in material costs for Gen. 2 vehicles.

The investment firm said it remains optimistic about Rivian's long-term potential despite challenges posed by short-term obstacles.

"It will take some serious strides for the company to regain trust in the short-term vision in the eyes of the Street," Wedbush added.

Rivian reported late Thursday mixed Q3 results, largely due to supply chain disruptions resulting in shortage of shared components within its Enduro motor system, Wedbush said.

The company reported a Q3 loss of $1.08 per diluted share, narrowing from a loss of $1.44 a year earlier and beating analysts expectations for a loss of $1.09. Q3 revenue was $874 million, down from $1.34 billion a year earlier and falling short of analysts' predictions of $991.5 million.

The firm reiterated its outperform rating on Rivian stock and kept a $20 per share price target.

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