Rivian Stock Slips Premarket As Bernstein Sees 50% Downside, Retail Cautious On EV Headwinds

synopsis

Shares of Rivian Automotive Inc. were lower in premarket trading Wednesday after losing over 1% in the prior session. 

The decline followed a bearish call from Bernstein, which initiated coverage last night with an ‘Underperform’ rating and a $6.10 price target, implying a downside of more than 50% from Tuesday’s close.

While acknowledging Rivian’s strong brand and long-term ambition to scale production, Bernstein’s analysts warned of slower EV market growth, intensifying competition, and limitations on brand expansion. 

The brokerage expects Rivian to achieve its target of producing 500,000 units by 2030 but says this alone will not deliver financial success for shareholders.

With breakeven still “years away”, Bernstein believes Rivian faces “mounting risks”, including persistent negative unit economics and significant cash burn per vehicle.

RIVN sentiment and message volume Jan 29 as of 7 am ET | source: Stocktwits

On Stocktwits, sentiment for Rivian was ‘neutral' ahead of the market open, improving slightly from bearish levels seen earlier. 

Investors are split. Bulls note that a federal judge has temporarily blocked former President Trump’s move to freeze Department of Energy (DoE) loans, which includes Rivian’s $6.6 billion loan to fund its Georgia plant. 

Optimists also highlighted Amazon’s ongoing support and third-party automaker interest in Rivian’s driving tech jointly developed with Volkswagen.

Bears remain fixated on Rivian’s unprofitability, pointing to negative unit and net margins, as the company continues to lose tens of thousands of dollars per EV sold.

Rivian shares have climbed over 20% in the past three months, benefiting from improving production and supply chain stabilization.

However, the stock remains down more than 4% year-to-date, with short interest at 14.2%.

All eyes will be on Rivian’s fourth-quarter earnings report next month, which will be closely watched for margin improvements and demand trends.

For updates and corrections, email newsroom[at]stocktwits[dot]com.