Electric vehicle makers are in a rough spot. Apart from trailblazer Tesla (NASDAQ: TSLA), other EV stocks have seen significant losses throughout 2024 — driven primarily by a challenging macro environment and the fact that traditional carmakers have largely entered the market, leveraging their scale to dash the hopes of ambitious newcomers.
Rivian Automotive (NASDAQ: RIVN) is one such company — since the company’s listing in November of 2021, RIVN stock price has been on a consistent downward trajectory. In April, Rivian shares fell to an all-time low price of $8.40.
However, there have been some signs of recovery since then. Better-than-expected delivery numbers caused RIVN shares to surge to as high as $18 in early July — but the rally didn’t last. Since the start of October, the automaker’s shares have traded in a $10 to $11 range.
Picks for you
More recently, the stock experienced a significant surge to the upside. On Friday, November 22, Rivian closed at $10.24 — by the final bell of the next trading day on Monday, November 25, prices rallied to $12.02 — a 17.38% increase. This latest development has brought year-to-date (YTD) losses down to 43.02%.
External catalysts are buoying Rivian stock — but can the rally last?
Rallies like this one tend to be short-lived unless they are directly caused by fundamental shifts, like for example a standout earnings call. This isn’t the case with Rivian — the surge was caused by a slew of positive news, although unfortunately most of it doesn’t demonstrate a significant change to the company’s value proposition.
Firstly, it was announced that the business had reached a ‘conditional settlement’ of Tesla’s 2020 lawsuit, which alleged widespread employee poaching and the theft of trade secrets. While the exact details were not revealed, Tesla informed a California state judge that it intends to dismiss the case — provided that those conditions are met by December 24.
In tandem with this, California Governor Gavin Newsom announced that his state could move to provide EV makers with rebates if President-elect Donald Trump follows through with his plans of ending them on a federal level.
Lastly, on Monday, the company announced that it had received a conditional commitment from the Department of Energy (DOE), entailing a $6.6 billion loan meant for the construction of a production facility near Stanton Springs, Georgia. By leveraging the Advanced Technology Vehicle Manufacturing (ATVM) Loan Program, Rivian hopes to increase its production capacity by 400,000 vehicles on an annual basis by 2030.
Only the last point is of material, long-term significance — but it will take years to play out, and Rivian has been struggling for quite some time now. The company’s Q3 2024 earnings report was mixed — and it continues to lose some $32,000 per vehicle sold. Going forward, it’s likely that the government’s approach to the domestic EV industry will change — and if Trump has a favorite EV company, it surely isn’t Rivian.
Featured image via Shutterstock
