5 Possible reasons why Rivian is dipping?

The Rivian stock has been consistently underperforming in the market for almost a week due to many reasons mentioned herewith. The stock dipped last by more than 4% on its previous close coming down to $86.28. Today, it has stooped further down by more than 5%. Within the 2nd hour of its trading, the stock recorded its lowest today, the price set at $77.86.

This American electric vehicle automaker and automotive technology company is looking forward to building electric SUVs and pickup trucks for both on-road and off-road driving. The aforementioned project is perceived by investors as very promising and hence the automotive company has created a lot of buzz in the market with its upcoming niche model.

The Electronic vehicle picking truck that the company is building is undoubtedly and arguably the best picking truck, the prototype, and design agree with the investors, but however fancy it sounds, at the end of the day, we are all just merely speculating a lot out of the EV trucks which are prospective and had not come out yet in the market. They are after all not operational in the market. In the case of market capitalization, the company is one of the biggest in the world but in the case of operations it barely exists, and therefore The undue speculation has also drawn major concerns amongst the investors. For the company’s plans to materialize its strategies must align with its implementation policies, which we know can be quite challenging given the company’s massive bright and rosy plans that it wishes to accomplish.

THE AMAZON DEAL

The company has also built EV picking trucks as a part of the partnership deal with Amazon. The Amazon deal is what keeps Rivian afloat and gives its stocks a bullish factor. But the problem here is, Amazon has also tied knots with Rivian’s rival company, Stellantis. Amazon is very impressed with the latter and has ordered EV automobiles from the company through a partnership deal. This has affected Rivian adversely (so much so, that the shares plunged 15% post-deal) as the deal resulted in the loss of potential order and eventually the dwindling of market share.

OTHER PLAYERS IN THE MARKET

There are other boys who are ruling the EV market such as Chevrolet and General Motors who are engaged in building EV vans, in fact, the latter has entered into an agreement with Walmart to deliver a certain no. of EV vans. Hence now we know that Rivian is not the only one out there, the investors have other options at their disposal hence the spotlight has been taken away from Rivian, one of the reasons causing its shares to dip.

OPERATING CHIEF STEPS DOWN

The COO of the company stepped down after his phased retirement spanning over since few months, Rod Copes left the company which is also predicted to be the reason for the further fall in the price this week.

DELAY IN THE DELIVERIES

The company recently announced a delay in deliveries of pickup and SUVs to 2023, the company could not meet the set target of 1200 units and fell short of a few hundred vehicles, it could produce 1015 units and sell only 920 last year. The inability to reach the pre-decided targets is also a major reason for a plunge in the share price of the company.

GLOBAL CHIP SHORTAGE

Currently, the global shortage in chips has vastly impacted the automobile industry and Rivian that gets the batteries it uses for R1T pickups and R1S SUVs from South Korean company Samsung SDI, is indirectly making a move partly in response to the chip shortage that has negatively hit the industry, also the reason for the shortage in the making of the deliveries.

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