Rivian stock slips as mainstream automakers increase EV targets

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Jan. 6 (Reuters) – Rivian Automotive Inc (RIVN.O) stock briefly fell below its IPO price on Thursday in a sale alongside other electric vehicle makers as the race market share intensifies and the incumbent companies increase their own production.

Rivian fell as low as $ 75.13, below its initial public offering price of $ 78 in November for the first time. The stock cut its losses and ended down about 3% to $ 87.33.

Competing electric vehicle makers Tesla Inc (TSLA.O), Lordstown Motor (RIDE.O) and Fisker (FSR.N) fell between 2.1% and 3.3%, with high-end growth stocks under pressure from expectations that the US Federal Reserve might generate interest sooner than previously thought.

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“Riparian investors need to manage their short-term expectations,” Morgan Stanley analyst Adam Jonas warned in a note to clients. “Tesla has shown us the extremely difficult path to accelerate the manufacture of electric vehicles. You cannot have the reward without the pain.”

Jonas considers Rivian’s stock to be “overweight”.

Rivian’s stock has fallen about 14% since the start of Wednesday, when Amazon.com Inc, one of Rivian’s biggest investors, announced it had partnered with automaker Stellantis NV (STLA.MI) .

The two companies will develop cars and trucks with Amazon software and deploy electric vans made by Stellantis to Amazon’s delivery network. Read more

U.S. stocks of Stellantis rose 2.5% on Thursday and are now up 11% in 2022.

Rivian signed a contract in 2019 to build 100,000 electric delivery vans for Amazon by 2025. But now the electric utility vehicle industry, a vital market for Rivian, is increasingly crowded.

Rivian said Thursday that he expects Amazon to purchase vehicles from many suppliers and that its partnership with Amazon will be intact.

BrightDrop, an electric utility vehicle company of General Motors Co (GM.N), has signed deals with Walmart Inc (WMT.N) and FedEx Corp (FDX.N), while Ford Motor (FN) is expected to deliver its cargo E -Transit van to customers this year.

Meanwhile, General Motors Co (GM.N) this week unveiled its Chevrolet Silverado electric pickup, while Ford has said it is ramping up production of F-150 Lightning. Both pickups are said to be competing with Rivian’s R1T at a time when it struggles to meet delivery dates due to chip supply constraints.

Ford’s inventory has climbed 18% year-to-date and is now at its highest level since 2001. GM is up 7% in 2022.

“Investors (rivals) are probably a little scared of the return of the traditional industry,” said Sam Abuelsamid, Guidehouse Insights analyst.

Ford and GM overtake Rivian in market value

Rivian, who lost $ 1.2 billion in the third quarter, is expected to deliver cars to customers this year. Production at its second plant in Georgia, in which it has invested $ 5 billion, is not expected to start until 2024.

“It’s still sort of to be proven in terms of investing as a stock compared to other names like Tesla and arguably Ford,” said David Keller, chief market strategist at StockCharts.com.

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Reporting by Nivedita Balu and Akash Sriram in Bengaluru Additional reporting by Eva Mathews and Tiyashi Datta, and Noel Randewich in Oakland, California Editing by Nick Zieminski and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.


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