Rivian Stock Slides on Downgrade Tied to Trump’s EV Tax Credit Elimination

Rivian Automotive shares fell sharply on Monday following a downgrade from Guggenheim, as analysts cited mounting challenges from recent policy changes under President Trump that scrap key incentives for electric vehicle buyers. This development raises questions about affordability for EV enthusiasts eyeing Rivian’s lineup, potentially slowing adoption in a competitive market. According to a Barron’s report, the stock dropped 2.9% to $12.66 amid broader headwinds for U.S. EV makers.

Policy Shifts Create Headwinds for EV Sales

The downgrade highlights immediate risks from the “OBBB,” or President Trump’s One Big, Beautiful Bill, recently passed into law. This act eliminates EV purchase tax credits worth up to $7,500 for qualifying vehicles starting in September. Losing this incentive will make it harder to sell more EVs, as buyers face higher upfront costs without the federal support that has boosted demand.

Building on that, emission policy changes add another layer of uncertainty. Congress is now challenging California’s authority to regulate air emissions, which underpins Rivian’s sales of zero-emission vehicle credits. These credits have been a revenue stream for the company, and any disruption could strain finances further. Guggenheim analyst Ronald Jewsikow noted in his report that these factors “introduce fundamental and narrative risks” to Rivian’s growth story.

Rivian’s Sales Outlook Dims Amid R1 Challenges

Rivian has already grappled with softening demand for its first-generation R1 family, including the R1S SUV and R1T pickup. The company plans to deliver about 43,000 of these vehicles in 2025, down from nearly 52,000 sold in 2024. This decline reflects broader struggles in the EV sector, where economic pressures and policy reversals curb consumer interest.

Looking ahead, Rivian aims to launch more affordable R2 and R3 models in 2026 to expand its reach.

However, Jewsikow adjusted his projections downward, stating, “Net/net, we now project 150,000 [sales] units in 2028 versus 185,000 prior.”

This figure falls well short of Wall Street’s consensus of 282,000 vehicles for that year, according to FactSet data. Mass-market automakers typically need around 400,000 annual sales to achieve positive operating income, given similar margins between EVs and conventional cars. Without hitting that threshold, Rivian may delay profitability, affecting its ability to invest in innovations like enhanced battery tech or autonomous features that appeal to enthusiasts.

Analyst Sentiment Reflects Cautious Outlook

Jewsikow downgraded Rivian to Hold from Buy and lowered his price target to $16, signaling tempered expectations for the stock’s near-term performance. Overall, only 26% of analysts covering Rivian rate it a Buy, per FactSet—far below the S&P 500 average of about 55%. The average price target sits just under $15, suggesting limited upside from current levels.

Rivian shares have declined about 2% year to date and 28% over the past 12 months, underperforming amid these pressures. For EV owners and potential buyers, this underscores operational implications: slower production ramps could mean longer wait times for new models, while economic factors like reduced incentives might push some toward hybrid alternatives. Regulatory shifts also highlight trends in the industry, where U.S. policy volatility contrasts with steadier support in markets like Europe or China.

This situation prompts EV enthusiasts to monitor Rivian’s upcoming earnings for clarity on adapting to the post-tax-credit landscape. As the company navigates these challenges, its focus on cost efficiencies and product diversification will be key to sustaining momentum in a shifting regulatory environment.