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Rivian (NASDAQ:RIVN) Shares Dip Amid EV Market Shakedown and Competition Heat

Analyst Team trader
Updated 16 Apr 2024

The electric vehicle (EV) market has been witnessing a remarkable change, as reflected in the recent performance of Rivian's stock (NASDAQ:RIVN), which saw its shares tumble over 8% on Monday. The drop in Rivian's stock arrives amid a wider EV industry recalibration, notwithstanding the absence of direct company-specific news.

Investors in Rivian have had a challenging year thus far, as the stock has lost over 60.19% of its value year-to-date. This decline is indicative of the headwinds facing the EV sector, providing a cautionary tale for those invested in this rapidly evolving industry.

One of the ripple effects contributing to investors' concern is Tesla‘s announcement of reducing the monthly subscription fee for its Full Self-Driving package, suggesting incentives to boost demand, possibly hinting at a less than robust demand for EVs. Adding to industry-wide anxieties are reports of layoffs within Tesla, further underscoring potential weaknesses in EV demand.

For Rivian, specifically, these market conditions have ushered in additional challenges. Rivian's order backlog, which at one time appeared as a beacon of sustained demand, has significantly dwindled as a result of cancellations, largely attributed to an economic environment that has slowed consumer spending across the board.

Furthermore, competition, a critical factor in the sector's dynamics, is ramping up, exerting pressure on EV startups like Rivian. Ford Motor Company, a venerated veteran in the automotive industry, recently lowered the price of its F-150 Lightning pickup trucks, thereby intensifying the fight for market share in the electric truck segment.


Analysts View on Rivian (NASDAQ:RIVN)

  • UBS analyst Joseph Spak has offered a glimmer of optimism by upgrading his rating on Rivian stock from Sell to Hold. Alongside this, he set a price target at $9, providing a conservative outlook relative to the current market sentiment.
  • On the brighter side for Rivian, BofA have a more positive outlook for Rivian, and have not given up on them yet. BofA have retained their Buy rating on Rivian shares, but have lowered the price target from $25 to $21.
  • Morgan Stanley lowered the Rivian's price target from $14 to $13, but has kept an Overweight rating over a week ago.

Despite the tumultuous outlook faced by Rivian and other EV peers, there appears to be a moderate level of optimism among analysts. Rivian currently holds a Moderate Buy consensus rating according to analysts, with an average price target of $16.91. This target suggests a potential upside of 101.31%, emblematic of the ongoing belief in the longer-term prospects of the company and its role in the electric vehicle revolution.

Lucid Group Inc (NASDAQ:LCID) another smaller player in the EV sector are also faltering pretty hard with their YTD dropping 41.45%. The EV landscape continues to recalibrate in response to the changing market conditions, consumer preferences and intensified competitive landscape. All players on this field appear to be on the decline for now, but what does the future hold for companies like Rivian and Lucid who hold a much smaller market cap.

With this ever changing landscape, Investors are encouraged to stay attuned to the EV industry dynamics that could significantly impact the fortunes of companies like Rivian. Whether Rivian can navigate through these choppy waters and emerge stronger remains a critical question for stakeholders and industry watchers alike.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.