Key Takeaways
- Shares of electric vehicle startup Rivian fell sharply Monday after analysts from Bank of America downgraded the stock.
- The analysts said the EV maker faces an uncertain demand and regulatory environment.
- Rising competition from other startups like Lucid and larger automakers like Ford and Chevrolet could also impact the sales picture, the analysts wrote.
Rivian (RIVN) shares slumped 8% on Monday after Bank of America analysts downgraded the electric vehicle maker’s stock.
The analysts downgraded Rivian stock to “underperform” from “neutral,” and lowered their price target to $10 from $13. They noted a “generally soft” demand environment for EVs, and said shifting priorities of the Trump administration away from EVs could hurt Rivian’s business.
“Given the Trump Administration’s focus on cost cutting, we believe there could be risk to RIVN’s $6.6 [billion] Department of Energy loan closed by the Biden Administration on [Jan. 16],” the analysts wrote.
Bank of America analysts are now the lone “sell” or equivalent rating among those tracked by Visible Alpha, along with four “buy” and 10 “hold” ratings.
BofA Says ‘More Downside Risk’ to Forecasts If Policy Changes Enacted
The analysts said Rivian’s forecast for 2025 was “softer than expected,” and that “there could be more downside risk if policy changes are enacted.” Rivian’s joint venture with German auto giant Volkswagen is also “complicating” projections for the EV startup over the next four years, they wrote.
Further, the analysts said a rising number of electric SUV and crossover competitors, including new models entering the market over the next two years from Lucid (LCID), Scout, General Motors’ (GM) Chevrolet, and Ford (F), could also complicate Rivian’s sales picture.
Despite Monday’s declines, Rivian shares have risen nearly 20% over the past 12 months.