Shares of Rivian Automotive (RIVN, Financial) dropped more than 11% on Wednesday after Baird analyst Ben Kallo downgraded the stock to ‘Hold’ from ‘Buy.'” However, the stock came under pressure as investors reappraised the outlook for electric vehicle (EV) manufacturers after mixed signals in the sector.
In recent months, two huge financial boosts have helped set Rivian into the public spotlight. Volkswagen Capital said a $5.8 billion investment over the next three years could make an electric vehicle more popular in the U.S. The U.S. Department of Energy said it has offered a conditional loan of up to $6.6 billion to help build a second U.S. factory. While these are good signs, Kallo remains concerned about no near-term catalysts and is nervous about potential challenges from a shifting regulatory landscape, such as the chance for lowered tax incentives under the imminent Trump administration.
Kallo said the company’s recent gains in stock have been due to its improved financial position factored in, but with limited upside unless EV demand speeds up. Next year, Rivian will begin production of its next-generation R2 vehicles, with deliveries starting in early 2026.
During the session, Rivian shares ranged from $12.80 to $14.53 and closed at $13.06. The stock is volatile year to date, as it reflects broader uncertainty in the EV market as manufacturers attempt to navigate shifting consumer demand and regulatory environments.
This article first appeared on GuruFocus.
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