The electric vehicle maker and automotive technology company Rivian Automotive Inc. Fell significantly on Thursday. Rivian stock (RIVN) declined by around 17% to $75.13 after opening at $91.88. The stock fell by about 15% over the past few months after going public in November.
The stock went down by almost 40% from its all-time high and touched the lowest price because of the increasing competition in the EV sector. The Amazon-backed electric pickup truck startup has suffered this fate because of a couple of factors that have weighed down the stock.
Rivian rose a little after the huge dip, and the stock, down 6.71 points, trades at $83.30 (-7.50%) on 6 Jan, at 11:44 am GMT-5.
The Rivian stocks are down as the company indicated that its production for last year would likely be slightly shorter than its initial target of 1,200 vehicles. The news made the investors nervous about the startup’s manufacturing ramp.
Additionally, the EV stocks had a mixed December, falling because of the uncertainties surrounding Covid-19 and the Omicron variant. The rising Covid cases and increasing interest rates also affected the EV stocks.
Rivian has also seen some developments as the company announced a new $5 billion production plant in Georgia that could assemble around 400,000 vehicles annually, working at the maximum output. The production in the Georgia plant is expected to begin in 2024. Rivian’s vehicles also continue to remain in demand, with the company witnessing preorders for its R1T pickup truck rising from 48,000 at the end of Q3 to about 71,000 in mid-December.
However, the positive developments could not stop the stocks from falling, and some of the blame went to the newly made Amazon’s Stellantis deal.
Rivian Automotive Inc., valued at over $90 billion, is in GM and Ford’s market capitalization range. The company has barely started commercial operations and sales, but its products are assumed to be very strong.
The competition in the electric vehicle sector has increased considerably as new players keep entering the industry. At the same time, the old players like GM and Ford also have started pledging to achieve a sustainable business goal and aim to work for zero-emission transport.
This is also a big reason for the massive dip in the Rivian stock as GM unveiled its electric Silverado pickup to rival the other companies.
Tesla has received around 1.25 million preorders for its cyber truck, while Ford has about 200,000 nonbinding reservations for its F-150 electric truck that is yet to hit the market.
Scaling the production isn’t very easy for the young automotive company Rivian, and there could be issues along the way. In the coming years, Rivian too is expected to become one of the strongest players in the EV game as it has already started rivaling the industry giants.
Earlier, Amazon, the company backing up Rivian, announced a deal with Stellantis NV for an electric delivery van, a potential threat to Rivian. The e-commerce giant’s deal became a catalyst for plunging Rivian stock.