Rivian Stock Skids On Baird Downgrade Citing Trump-Linked Risks: Retail Confidence Dips

Shares of Rivian Automotive Inc. dropped over 3% at the open on Wednesday, on track to extend losses from the previous session. 

The decline came after Baird downgraded the stock to ‘Neutral’ from ‘Outperform,’ lowering its price target to $16 from $18. 

The brokerage cited a challenging near-term outlook for electric vehicles (EVs) and renewables, driven by uncertainty around the Inflation Reduction Act and anticipated slower growth in 2025.

Baird also pointed to geopolitical risks tied to the incoming U.S. administration. 

President-elect Donald Trump’s transition team has reportedly recommended rolling back support for EVs, including eliminating the $7,500 consumer tax credit and strengthening measures to block EV-related imports from China. 

Currently, most Rivian models qualify for a $3,750 tax credit, while leased vehicles qualify for the full amount.

In its note, Baird expressed skepticism over Rivian’s 2025 catalysts. “With the Volkswagen joint venture having recently closed and [the] Department of Energy funding announcement (a positive surprise) in the rearview, we see few catalysts in 2025 and expect shares to languish with EV sales,” the analyst wrote.

RIVN message volume meter Dec 18 as of 9:30 am ET | source: Stocktwits

Rivian’s sentiment on Stocktwits shifted to ‘bearish’, down from ‘extremely bullish’ a day earlier. 

A skeptic questioned Rivian’s valuation, suggesting alternative investments in tech giants like Alphabet, AMD, or Nvidia.

Adding to concerns, an SEC filing on Tuesday revealed that CEO R.J. Scaringe sold 71,429 shares of Class A Common Stock for $975,198. However, the transaction involved stock options purchased at $2.99, with the sale aimed at covering tax obligations.

A bullish user remained optimistic about the company’s upcoming fourth-quarter report, hoping it would mark Rivian’s first profitable quarter.

Last month, Rivian said it had secured a preliminary $6.6 billion federal loan approval to fund a new assembly plant in Georgia. 

Earlier this month, Benchmark Securities initiated coverage with a ‘Buy’ rating and an $18 price target, highlighting Rivian’s potential to capture a sizable market share over the next decade, backed by contracts with Amazon, its tie-up with Volkswagen and its highly rated vehicles.

Still, Rivian’s road to profitability remains steep. The company has reportedly burned through nearly $20 billion since its inception and reported a third-quarter loss of approximately $39,130 per vehicle, up from $32,700 in the second quarter. 

The stock is down over 32% year-to-date, reflecting investor concerns over its long-term trajectory amid mounting external pressures.

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