Rivian Automotive(NASDAQ: RIVN) shares have been in a free fall recently. That continued today as seemingly bad news from electric vehicle (EV) makers continued to be released. Even though there hasn't any real negative news out of Rivian itself, shares have plunged by more than 50% in the last three months.
Today's drop seems to be more of the same. Bigger-picture EV news that implies a continued drop in demand seems to be hitting Rivian particularly hard. Rivian stock was down 5.1% to start this trading week as of 11:45 a.m. ET Monday.
EV makers cutting back
One factor that hit Rivian shares recently was the decision by Ford Motor Company to cut pricing on its F-150 Lightning models by as much as $5,500. That vehicle is one of the only direct competitors to Rivian's R1T full-size electric pickup truck.
The downward momentum continued today when EV leader Tesla told employees it would be laying off at least 10% of its global workforce. Tesla delivered about 9% fewer vehicles in the first quarter compared to last year's first quarter, which disappointed investors. But Rivian's first-quarter deliveries matched its expectations and the company says it is on track to produce 57,000 EVs this year.
That's about the same production volume as last year as the company takes some delays to implement upgrades in preparation for its next generation R2 models. The lower-priced R2 SUV is expected to be available beginning in 2026.
That's still a relatively long way away, and EV market demand is currently in question. Ford's price cuts were meant to draw down unsold inventory. And Tesla's downsizing also doesn't imply that demand is accelerating. But Rivian has so far established its unique brand and has a path to expand its market with lower-priced vehicles. Investors who foresee a successful journey to that end might do well buying Rivian shares at these all-time lows.
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Howard Smith has positions in Rivian Automotive and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
