Rivian Shares Battered by Downgrade

By Douglas A. McIntyre Published Mar 21, 10:00AM EDT

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A Piper Sandler analyst cut his rating on Rivian Automotive Inc. (NASDAQ: RIVN) stock and slashed his price target.
Deep problems plague the electric vehicle (EV) maker.

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Rivian Shares Battered by Downgrade — © zakokor / iStock via Getty Images

Shares of small electric vehicle (EV) maker Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) have performed poorly recently, and a Wall Street analyst thinks that will only worsen. Piper Sandler’s Alexander Potter lowered his rating on Rivian to Hold from Buy and cut his $16 price target to $13. The stock trades below $11 now.

EV stocks have dropped sharply recently, and Rivian shares are off 18% this year. While shares of industry leader Tesla Inc. (NASDAQ: TSLA) are down more, much of that decline has been attributed to the absence of CEO Elon Musk, who is working on restructuring the U.S. government.

Investors must guess if the downdraft in Tesla sales in the United States, China, and Europe will pull down the entire industry. Potential EV buyers still face several hurdles. One is charging time. However, BYD, the China EV giant, said it would cut charging time to five minutes. Range is still an issue, as is tire wear and cold weather charging.

Rivian’s Deep Problems

The direction of the EV market cannot hide Rivian’s deep problems. In the first quarter of 2024, it said it produced 12,727 and delivered 14,183 vehicles. The company blamed a parts shortage for some of the shortfall. Next year, Rivian said it would deliver between 46,000 and 51,000 vehicles. However, it expects an adjusted EBITDA loss of $1.7 billion to $1.9 billion next year. That raises the issue of how far out profitability is and whether demand for its products and its cash base can get it to that point.

Rivian cannot hide that its revenue in the fourth quarter rose only from $1.3 billion in the first quarter to $1.7 billion. Its loss was $744 million, compared to $1.5 billion a year ago.

All its vehicles are expensive at a time when people are looking for lower-priced EVs. Its prices range from $75,900 for the R1S Dual Standard to $105,900 for the R1S Tri. There is no reason to believe there is more than a niche market for these.

Rivian Price Prediction and Forecast 2025-2030

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.