Rivian Stock Plummets 31% in Four Weeks on VW Deal, Demand Worries
Rivian Automotive, a notable player in the electric vehicle (EV) market, has faced significant challenges recently. The company’s stock has plummeted by 31% over the past four weeks, primarily due to concerns over missed delivery targets and complications related to its partnership with Volkswagen AG.
Stock Performance and Recent Decline
On December 22, Rivian shares reached a peak of $22.73, highlighting a four-month rally that began in mid-August. However, following the company’s Autonomy and AI Day on December 11, where plans for enhanced autonomous capabilities were revealed, the stock has sharply declined. By Monday, shares had sunk to a three-month low of $15.56, finishing the day at $15.75, marking a 1.25% decrease.
Year to date, Rivian’s stock has lost approximately 20% of its value.
Delivery Shortfalls
In the fourth quarter, Rivian delivered 9,745 vehicles, falling short of Wall Street’s expectations of 10,050 units. For the full year, the company completed 51,579 deliveries, a reduction of roughly 18% from the previous year and below the anticipated 51,900 vehicles. Details regarding the company’s 2026 delivery targets will be shared during the next earnings call on February 12.
Challenges with Volkswagen Partnership
Rivian’s partnership with Volkswagen, established in June 2024, has been under pressure due to reported difficulties in their software joint venture. This alliance, which could involve investments up to $5.8 billion, aims to enhance digital systems across Volkswagen’s various brands, including Audi and Porsche. However, Rivian’s lower-than-expected delivery figures have led to integration issues and delays in several model launches.
Volkswagen CEO Oliver Blume has made this collaboration a high priority but now faces rising concerns, particularly from Audi, about further setbacks. Rivian’s software is predominantly designed for battery-electric vehicles, causing compatibility challenges with Volkswagen’s diverse lineup, which may still include combustion and hybrid models for a longer duration than previously anticipated.
Upcoming Production Plans
Despite recent setbacks, Rivian plans to start producing customer units of its R2 SUV this spring in Normal, Illinois. This production timeline is among the most concrete Rivian has offered for the anticipated model, which is aimed at capturing a broader market segment with a starting price of $45,000. Initial production will likely focus on higher-end variants before the rollout of the more affordable version.
Expert Opinions and Market Outlook
In a recent interview, CNBC’s Jim Cramer suggested that Rivian may be a more favorable investment compared to its competitor, Lucid Motors. However, he cautioned against investing in either company based on their current circumstances. Rivian has amassed a staggering deficit of over $26 billion, the highest among EV startups. As of the latest market close, the company’s market capitalization stands at approximately $19.3 billion.
Rivian’s next earnings report, where it may provide further insights into its financial situation and strategic direction, is scheduled for February 12.
