Rivian’s move is part of a broader shift in the industry this year, with automakers pursuing cheaper models to boost demand after electric vehicle sales took a hit due to the expiration of the $7,500 tax credit and other policy changes from the Trump administration.“Nothing is more important to the stock itself than a timely launch of the R2 SUV, and in this regard Rivian remains essentially on track,” Piper Sandler analysts said.
As a result of the policy changes, several companies have scaled back production of electric cars and switched to hybrid and gasoline vehicles, with some companies, such as Ford and General Motors, taking billions of dollars in associated write-offs. Yet they have kept their affordable EV plans intact.
Ford is now focusing on rapidly developing its $30,000 EV model, while GM has brought back its affordable Bolt EV from just under $30,000. Tesla said it would stop selling its high-end Model S sedans and Model X SUVs after rolling out stripped-down variants of the Model Y SUVs and Model 3 compact sedans to the masses.
Lucid, known for its luxury electric Air sedans and Gravity SUVs, has also launched cheaper variants. For Rivian, which remains unprofitable, the R2 SUVs are expected to deliver a 53% increase in deliveries to between 62,000 and 67,000 vehicles by 2026. That compares with estimates of 64,130 vehicles, according to Visible Alpha data.
“Rivian has had its fair share of struggles on its journey to become a major player in the EV world, but the fourth quarter results suggest the company is finding its feet,” said Dan Coatsworth, head of markets at AJ Bell.
If early trading gains hold, Rivian is expected to add more than $3 billion to its $17.16 billion market value.
The company’s shares rose more than 48% last year, partly due to optimism around R2. But overall EV sentiment remains subdued this year, leaving Rivian shares down 29% at the last close, while Tesla is down about 7%.
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