Rivian Shares Plunge on Tesla News

By Douglas A. McIntyre Published Apr 3, 6:45AM EDT

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Rivian Shares Plunge on Tesla News — © 2022 Rivian R1T (in Glacier White), front 6.21.22 (CC BY-SA 4.0) by Kevauto

The quarterly results of electric vehicle (EV) market leader Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) will probably determine the success or failure of the EV business in America, at least in the near term. Tesla delivered 386,810 vehicles in the first quarter, less than expected. Tesla stock dropped 4.9%. Those of tiny rival Rivian Automotive Inc. (NASDAQ: RIVN) dropped more, ending the day off 5.2%.

Rivian and other tiny EV companies, like Lucid, are already viewed as casualties of the slowing sales of electric vehicles in America. Rivian stock is down 77% in the past two years to $10.50 per share.

Unfortunately, Rivian’s recent good news could not support its stock price. the company delivered 13,588 vehicles in the first quarter and said it would produce 57,000 for the year. Both numbers were considered positive compared to expectations. However, Rivian’s stock price is based on whether it will survive more than its quarter-to-quarter sales.

Rivian has two disadvantages and challenges. The first is its small share of a challenging industry. EVs continue to do poorly because of price, range, and number of charging stations.

The second is that the EV market gets more competition each year. Management has to worry that, beyond companies like Tesla and Ford, less expensive vehicles from Chinese companies, led by BYD, eventually will be available in the United States. The federal government is blocking sales of these Chinese products. That will not last. Chinese EVs are often priced at half what U.S. EVs are.

Rivian needs to be bigger to survive, particularly as the number of consumer EV options rise.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.