Rivian Down 85%

Rivian (NASDAQ: RIVN | RIVN Price Prediction) shares are down just over 85% in the last five years. The S&P 500 is up over 40% in the same period. Rivian shares trade like those of a company that is going out of business.

The only thing that is helping the stock is a deal with VW. It could be worth $5.8 billion. On the other hand, there are hurdles. It certainly is not something investors can count on. It is for the joint development of the product and software. But VW isn’t making any big promises.

All the other Rivian news is bad. It has just recalled 24,214 vehicles because of problems with its self-driving system. Since Rivian makes so few vehicles, it would seem each one should be perfect.

The case for Rivian to remain in business, at least as a standalone company, is grim. It competes in a US EV market that is exceedingly crowded, and in which sector sales growth is likely to be tough. First, there is Tesla (NASDAQ: TSLA), which holds a 48% market share. That is down from a peak of 80% but is still formidable. The market share of GM (NYSE: GM), Ford (NYSE: F), and Hyundai/Kia is approaching 10%. And all three have access to massive sums of cash. Each can also build EVs at high capacity.

The loss of the $7,500 federal tax credit on the purchase of some EVs will damage most companies. iSeeCars expected EVs as a percentage of new car sales in the U.S. to drop from 8% to 4%. That 4%, they say, will be in place from 2026 to 2028.

Rivan’s vehicles are expensive. The lowest price for any of its models is $76,990. Models with more features run above $100,000. Its target market is tiny.

The worst problem with Rivian is its losses. On revenue of $1.3 billion in the most recently reported quarter. It lost $1.1 billion. Losses at this level will continue. It only produced 5,979 vehicles in the quarter.

There is no reason for the stock to go up.