Softer sales and the loss of tax credits will hurt this EV maker, says Guggenheim
It’s time to move to the sidelines when it comes to Rivian , according to Guggenheim. The investment firm downgraded the electric vehicle stock to neutral from buy. Analyst Ronald Jewsikow simultaneously removed his prior price target of $16 on the stock. One reason for the downgrade, Jewsikow said, was softer long-term sales assumptions of Rivian’s R2 and R3 models, given weakness in R1 revenue. Incentive changes for electric vehicles, including the loss of tax credits following the passage of President Donald Trump’s spending bill, are also a clear obstacle for Rivian. RIVN YTD mountain RIVN YTD chart “While we remain confident in cost-reduction targets for the R2, something about which we have had ample debates with bears over the last year, we no longer have confidence in the required volumes and/or required ASPs to support our prior price target,” the analyst added. “In short, softening R1 demand is a modest negative for R2/R3 volumes, and the loss of EV incentives is likely to negatively impact long-term ASP and/or volume potential as well.” In the short term, this electric vehicle tax credit loss could result in a modest demand uplift, as consumers try to get their buys in before the incentives are removed. Unfortunately, any positive offsets from the tax removal will not be enough to outweigh the negative consequences from lost consumer credits, Jewsikow added. “Longer term, the lost EV credits increase the effective cost of the R2/R3 models, though we would note that we would not expect demand-related risks for the R2 to materialize until 2027 at the earliest given the strong preorder backlog,” the analyst wrote. Shares of Rivian have slipped 2% this year and closed at $13.03 on Friday. The stock lost more than 1% in the premarket.
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