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Prediction: After Nikola (NKLA), Rivian (RIVN) Is the Next EV Maker to Go Belly Up

Austin Smith

Published: March 5, 2025 11:51 am

24/7 Wall St. Key Points:

• Nikola (NASDAQ: NKLA) filed for Chapter 11 bankruptcy, marking the collapse of another SPAC-backed EV startup, burdened by past fraud issues and unsustainable financial losses.
• Rivian (NASDAQ: RIVN) faced a sharp 9% stock drop following a Bank of America downgrade, citing mounting risks, including potential loss of federal support and broader EV market headwinds.
• The potential repeal of Inflation Reduction Act incentives under a future Trump administration poses significant risks to smaller EV makers like Rivian and Lucid (NASDAQ: LCID), intensifying market volatility.
• If a crisis is around the corner, make sure you speak to a financial advisor and make sure you’re positioned to weather the storm. Smart Asset can connect you with 3 serving your area in just a few moments. Click here to get started. (sponsor)

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Transcript:

[00:00:04] Doug McIntyre: You predicted that one of the small ev companies was going to go belly up and actually more than one has but What was your prediction?

[00:00:13] Lee Jackson: Well, we thought And it wasn’t all that long ago that Nikola the truck EV maker Was done and they filed chapter 11 recently, and they are done.

[00:00:23] Lee Jackson: There’s no way out of this for them. It’s not like Rivian or Lucid where there’s maybe a prayer, and something along those lines, but Nikola is done. So they’ll just sell off the parts and move on and I think I mentioned before the CEO I think is in prison for wire fraud and all sorts of Interesting items like that, but they’re done and it was remember it was a big spack in like 2020 and at one point was worth billions of dollars huge dollars and they were getting money from gm and other some of the big three and They’re done and all that money.

[00:00:59] Lee Jackson: They just burned it up.

[00:01:01] Doug McIntyre: Well, look, I’ll give you an example of why I’m nervous about these other small, EV companies like Rivian was downgraded today by bank of America. Oh, pretty, nasty. No, just sort of, we’re worried that this thing is going to make it. the stock’s down. It’s down 9 percent right now on a single downgrade from an analyst and to me, that to me, that says a whole lot about Wall Street’s view of these things.

[00:01:31] Doug McIntyre: I mean, the call was Bank of America (NYSE: BAC). The key phrase was that risks are piling up. And the risks are pretty simple right now, and they’re mostly the administration. Okay, you get rid of the credits. Right. You get rid of the build out on the charging stations. Right. you were going to build hundreds of charging stations on highways.

[00:01:50] Doug McIntyre: That’s kaput. That’s gone. And, I just think, General Motors (NYSE: GM) and Ford (NYSE: F) lose money on this stuff, but they have money to lose. Tesla (NASDAQ: TSLA) makes money, right? These guys lose money and have no money. So, we should be so lucky. Well, listen, I think you’re calling the bankruptcy here was right. And it makes me more nervous about Lucid and Rivian.

[00:02:13] Lee Jackson: Well, and I also read, that wasn’t there a pretty big loan that the Biden administration had promised to Rivian as part of the EV deal the inflation reduction act I guess or one of those and I think that’s kind of on the rocks and it was 6. 6 billion I think you’re kind of counting that until election day.

[00:02:38] Doug McIntyre: I think the trump administration is going to take everything in the Inflation Reduction Act and cancel it and probably try to claw back the money that they’ve already paid out.

[00:02:49] Lee Jackson: Oh, absolutely. They’re trying to do that anyway, with a lot of the USA aid money that has just apparently been tossed to the wind. It was the whole tossing gold bars off the Titanic, near the end of the administration, the prior administration American citizens. I think they’re outraged a lot of this because they don’t benefit.

[00:03:10] Lee Jackson: They for it down the road. And I think even though there’s been some complaining, about these, federal layoffs, look, Amazon’s (NASDAQ: AMZN) laid off 27, 000 people since 2022. And, a lot of the Metis fixing to lay off a bunch of people. So, they really shouldn’t complain about, bureaucrats that don’t do anything.

[00:03:37] Lee Jackson: And yeah, I think you’re right. I think any of the renewable stuff and EV stuff that’s tossed into these old Biden plans will be totally canned.