Rivian Automotive (NASDAQ: RIVN) stock slid 6.7% through noon ET on Thursday -- but not because of any mistake that Rivian made.
This time, the blame belongs to Ford Motor Company (NYSE: F), which just declared a price war in electric trucks, and turned Rivian stock into roadkill in the process.
Have you driven a Ford lately? (Because it's cheaper than it used to be)
Any day now, Ford archrival General Motors(NYSE: GM) will begin selling its new Silverado EV electric pickup truck in competition with Ford's F-150 Lightning. Ford saw its automotive rival inching closer in the rearview, however, and is gunning the motor to stay ahead -- lowering the price of some F-150 Lightning models by as much as $5,500, as CarsDirect.com reported this week.
It's not entirely clear whether this move will be enough to maintain Ford's lead over Chevy. Notably, the lowest-trim "Pro" F-150 Lightning still costs a pricey $54,995, and the most expensive "Platinum" Lightning still costs a nosebleed $84,995. (Price cuts are all on the mid-tier vehicles). What is clear is that Ford's pre-emptive strike at Chevy, and the price war it foreshadows, seems to be spooking investors in Rivian.
Is Rivian stock a sell?
So how worried should Rivian investors be? Honestly, until we see the new Silverado EV in person, and can tell how well it compares to the Rivian R1T, or even whether it's targeting the same kind of truck-buyer market, it's hard to say. But given Rivian's struggles growing demand for its EVs last year, and the fact that its R1T electric truck's starting price is already higher than that of most Ford F150 Lightning trims, the potential for more competition from General Motors, and lower prices at Ford, probably isn't great news for Rivian.
Long story short, Rivian's work just got harder. And if it has to cut prices to compete in a price war with Ford and Chevy, its path to profitability probably just got a bit longer, too.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
