Feb 20 (Reuters) - Rivian forecast an

unexpected drop in deliveries for the year as higher borrowing

costs and growing preference for gasoline-electric hybrid

vehicles temper demand for its more expensive electric pickup

trucks and SUVs.

The company, however, reported its first-ever gross profit

of $170 million in the fourth quarter, compared with a loss of

$606 million a year earlier.

The company also expects higher costs from U.S. President

Donald Trump's plans to impose tariffs on Mexico and Canada.

"We have a supply chain that does have footprint in both

Mexico and Canada, and so large tariffs being applied will just

translate to higher costs for us," CEO RJ Scaringe told Reuters.

"There's such high levels of uncertainty that will

ultimately impact consumer behavior and top line revenue," he

added.

Rivian forecast annual deliveries of between 46,000 and

51,000 vehicles, lower than Wall Street expectations of 55,520,

according to 15 analysts polled by Visible Alpha. Last year, it

delivered 51,579 units.

The EV maker is also planning to halt production for more

than a month in the second half of 2025 to upgrade its assembly

lines, as it gears up to launch the Tesla Model Y-rivaling R2

vehicle and start its deliveries early next year.

EV makers are staring at a tough market, with Elon Musk-led

market leader Tesla reporting its first drop in annual sales in

2024.

Electric truck maker Nikola ( NKLA ) recently filed for

Chapter 11 bankruptcy protection and said it would pursue a sale

of its assets after struggling with rapid cash burn and funding

challenges amid weak demand.

Rivian, too, continues to burn billions of dollars in cash

every year. However, the rate at which it expends cash is

expected to slow as profitability improves along with its sales

volumes.

Revenue for the last three months of the year stood at $1.73

billion, compared with analysts' average estimate of $1.4

billion, according to LSEG data.

(Reporting by Akash Sriram in Bengaluru; Editing by Anil

D'Silva)