As the electric vehicle (EV) business in the United States falls apart, tiny EV company Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) is falling faster. The only chance niche EV companies can thrive is to offer unique products. Its sales forecast shows it has not been able to shine next to Tesla, Ford, and GM, which have led sales in the U.S. market.
An extremely disappointing forecast and bad numbers for the quarter just ended dragged down Rivian’s stock. The company produced 10,720 vehicles and delivered 13,201 vehicles during the third quarter. Worse, its guidance for the year dropped. “Delivery results for the quarter are in line with Rivian’s outlook. Today the company is narrowing its 2025 delivery guidance range to 41,500 to 43,500 vehicles.” In July, the forecast was 40,000 to 46,000.
What’s the Problem?
One headwind to future results is the elimination of the $7,500 tax credit for EVs, which ended on September 30. Rivian will need to reduce prices so that the end of the benefit does not hit consumers. If that happens, it will lose more than the billions of dollars it has already lost since becoming a public company on November 10, 2021. Shares soared over 53% that day and put the company’s market cap briefly above $100 billion. Its market cap is $16 billion today.
It is hard to see how Rivian’s market cap is still so high. The tax credit’s expiration is expected to damage the entire industry. iSeeCars predicted EV sales will go from 8% of all new car sales in the first three quarters of the year to 4% for the next two years.
News from another small EV company must have shaken investors. Lucid Group Inc. (NASDAQ: LCID) said it would run out of money about a year from now. Raising more money will mean dilution, but current shareholders worry whether it can raise money at all.
Rivian has pinned its future on its new R2, a small SUV with a starting price of about $45,00 that will launch next year. That may be too late. The price of its current product offerings ranges from $70,000 to above $100,000. The R1T Quad has a base price of $116,000. Meanwhile, the industry is pursuing EVs with price points below $30,000 to jumpstart national sales.
Rivian’s revenue in the second quarter totaled $1.30 billion, barely above $1.16 billion in the year-ago quarter. The loss for the quarter was $1.16 billion, compared to $1.46 billion a year ago. The company could lose over $4 billion this year.
Will Rivian Survive?
Rivian’s chance to make it as a public company is low. Rivian created a joint venture with Volkswagen that could have VW invest as much as $5,8 billion. However, based on the deal terms, the figure could be much smaller than that.
Rivian cannot continue downward revisions in its sales forecast. These only show how dire its situation is.
Rivian Stock Price Prediction and Forecast 2025-2030
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