An unexpected effect of a possible second Trump presidency, as it turns out, might be a significant boost for the stock of the currently-embattled electric (EV) maker Rivian (NASDAQ: RIVN).
Indeed, at a rally speech, presidential candidate Donald Trump warned – or promised, depending on the perspective – that he will, should he get elected, impose a 100% tariff on foreign-made electric vehicles.
While Trump specifically singled out Chinese plans for making massive production facilities in Mexico as a big danger for U.S. manufacturing he implied he wants to incentivize domestic production.
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Given that other major EV makers are either Chinese, have a significant number of major production hubs abroad like Elon Musk’s Tesla (NASDAQ: TSLA), or are foreign-owned with plans to build factories elsewhere like Lucid (NASDAQ: LCID), Rivian finds itself in a unique position.
Why Rivian might benefit from a Trump presidency
Indeed, the relatively small EV maker, at the time of publication, has a single production facility located in Normal in Illinois.
This means that Rivian is the sole manufacturer not in danger of having to significantly alter its production flow should a hypothetical Trump presidency impose punitively protectionist measures to safeguard domestic production.
Nonetheless, it is worth noting that while Rivian might see massive benefits from such a scenario, it is doubtful how much domestic market share it could grab. For example, while Tesla’s facilities are spread across the world, two out of its three biggest plans are located in the U.S.
Still, Tesla would have a more uphill battle given that it would likely be forced to move more production on U.S. shores should the industry exit the EV winter and should current trends of Chinese penetration of non-American markets continue.
Such an outcome could substantially eat into Tesla’s profits given that the average automotive manufacturing wage in the U.S. is nearly ten times higher than in Mexico – the site of an upcoming gigafactory.
Rivian stock price chart
Still, while Rivian might indeed be up for a boom in 2025, the second quarter of 2024 has only just begun, and there are no guarantees that Donald Trump will again be the president.
In the meantime, Rivian has more than a fair share of troubles and has been hit very hard by the ongoing EV winter. Indeed, since the year started, RIVN shares plummeted by 51.40%.
On the other hand, even without hypothetical future boons, more recent trading has been slightly more positive with RIVN’s downside dropping to only 1.77% on the monthly chart and with the EV maker being 12.57% in the green in the latest full week of trading.
Finally, Rivian price today stands at $10.26 after a middling performance in the initial hours of Monday’s trading that saw it rise 1.84% by press time.
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