Rivian Hammered by Another Downgrade

A Jefferies analyst has downgraded the stock of troubled electric vehicle maker Rivian Automotive Inc. (NASDAQ: RIVN) from Buy to Hold. The analyst who made the decision said demand could be soft. However, recent cost cuts helped keep the outlook from falling further. The target price Jefferies has on Rivian was $16, but the stock trades for just below $15 now. That is hardly an endorsement of its prospects.

The highest the price of its stock went since it came public in November 2021 was $179. That means it has dropped more than 90% from that high point. Its prospects have taken a beating because of tiny sales and huge losses.

The Case for Rivian

When Rivian recently released its latest quarterly results, the news was almost entirely negative. The earnings numbers showed a tiny improvement year over year. However, the trouble Rivian faces is tremendous. It only delivered 8,640 vehicles in the first quarter.

Rivian management trumpeted a positive gross profit of $206 million in the quarter. However, revenue barely increased from $1.20 billion in the year-ago period to $1.24 billion, and it had a net loss of $545 million. Management said the company would have a negative adjusted EBITDA of $1.7 billion to $1.9 billion last year. It blamed much of the red ink on tariffs.

Rivian management continued to struggle to create a strong case for shareholders. One bizarre comment in the earnings report was that its R1S was the best-selling SUV among those priced at over $70,000 in California for the quarter. Another was that it had over 36,000 demo drives in the first quarter. The delivery figures for the period show how few of those people bought a Rivian.

The company also dropped its delivery outlook for 2025 to between 40,000 and 46.000. Its previous forecast was 46,000 to 52,000.

Rivian SUVs and pickups are expensive, severely limiting the company’s target market. Its R1S has a base price between $76,000 and $106,000, and its R1T truck has a base price between $70,000 and $100,000. If anything, EV companies in the United States are trying to cut prices.

Rivian competes with electric pickups sold by some of the world’s most well-financed car companies, including Ford, Chevy, and Tesla. Each has a plan to increase its model line. Tesla, Kia, Ford, Hyundai, BMW, Chevy, and Volkswagen have electric SUV models.

To worsen matters, Rivian faces the same challenges all EV companies face. Consumers worry about the number of charging stations, range, tire wear, and battery charge levels in cold weather.

Its major investor, Volkswagen, may buy Rivian, but it will not last as a standalone company.

Rivian Stock Price Prediction and Forecast 2025-2030

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