Rivian Stock Rises As Tesla Trade Secrets Case Nears Settlement, Newsom Counters Trump's EV Tax Cut Plans: Retail Energized

Shares of Rivian Automotive Inc. ($RIVN) surged nearly 14% on Monday, driven by two key developments. 

Tesla ($TSLA) reached a “conditional” settlement in its lawsuit against Rivian, which had accused the electric vehicle maker of poaching employees and stealing trade secrets. 

The Elon Musk-owned electric vehicle maker did not disclose specifics of the settlement but expects to seek dismissal of the case by Dec. 24, according to Bloomberg.

Secondly, California Governor Gavin Newsom announced plans to propose a new version of the state’s Clean Vehicle Rebate Program (CVRP) if President-elect Donald Trump moves forward with eliminating federal EV tax credits.

Newsom’s proposal aims to replace federal incentives with state-level rebates, which could be funded by California’s Greenhouse Gas Reduction Fund, according to the statement from the governor’s office.

It cited that the original CVRP, phased out in 2023, had funded 594,000 electric vehicles and saved 456 million gallons of fuel. 

California is touted as a national leader in clean vehicle adoption with over 2 million zero-emission vehicles sold.

However, Tesla may face hurdles under the new proposal, as market-share caps in the draft plan could exclude its best-selling models, the governor’s office told Bloomberg.

Despite Tesla's stock hitting a two-year high earlier in the day after UBS raised its price target to $226 from $197 while maintaining a ‘Sell’ rating, shares dipped over 1% by midday.

Retail sentiment around the stock was in the ‘bullish’ territory (65/100) with users suggesting the downtick is temporary.

Tesla Sentiment and Message Volume on Nov 25 as of 2:10 p.m. ET | Source: Stocktwits

Meanwhile, Newsom’s proposal not only lifted Rivian’s stock, but also boosted shares of other EV makers, including Lucid ($LCID), which rose 5%, and VinFast Auto Ltd. ($VFS), which gained 1%.

Rivian Sentiment and Message Volume on Nov 25 as of 2:10 p.m. ET | Source: Stocktwits

Retail sentiment around Rivian turned ‘bullish’ (69/100) from ‘neutral’ a day ago but users are divided over what’s driving its most recent stock surge. 

However, users on Stocktwits are divided over the stock's recent rally, with many attributing the surge not to tax credits or Tesla’s lawsuit settlement but to optimism surrounding Rivian’s anticipated fourth-quarter earnings in February.

Stocktwits Poll on Rivian's Stock Movement on Nov 25 as of 2:10 p.m. ET | Source: Stocktwits

Rivian’s stock has lost 46% of its value this year, while Tesla has gained 40% year to date.

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