Electric vehicle (EV) manufacturer Rivian Automotive Inc. (NASDAQ: RIVN) has come under pressure from Wall Street, with Guggenheim downgrading the stock from “Buy” to “Neutral,” and removing its previous $16 price target.
Analyst Ronald Jewsikow cited weaker long-term sales projections for Rivian’s upcoming R2 and R3 models, primarily due to softness in current R1 model revenues and the anticipated loss of EV tax incentives.
Jewsikow noted that while Rivian’s cost-reduction strategies for the R2 remain credible, declining demand for the R1 and changes to US EV tax credit policy, driven in part by President Donald Trump’s recently passed spending bill, are likely to weigh heavily on the company’s ability to achieve necessary average selling prices (ASPs) and volume targets.
“We no longer have confidence in the required volumes and/or required ASPs to support our prior price target,” Jewsikow said.
The analyst warned that the loss of consumer tax credits will raise the effective cost of R2 and R3 vehicles, dampening long-term demand, though he expects this impact to materialize no earlier than 2027 due to a robust preorder backlog.
In the short term, some demand may be pulled forward as buyers rush to make purchases before incentives disappear.
Still, Jewsikow believes this will not sufficiently offset the longer-term negatives.
Cantor Fitzgerald maintains neutral stance despite new product launch
Echoing Guggenheim’s cautious tone, Cantor Fitzgerald reiterated its Neutral rating on Rivian, maintaining a $15 price target.
The firm’s stance follows Rivian’s latest production and delivery update, which showed notable year-over-year declines.
Rivian produced 5,979 vehicles in Q2 2025, well below consensus expectations of 11,325 and down from 9,612 in the same quarter last year.
Vehicle deliveries for the quarter totaled 10,661, meeting analyst expectations but below the 13,790 units delivered in Q2 2024.
Rivian attributed the production drop to retooling efforts ahead of its model year 2026 vehicles.
Despite setbacks, the company has maintained its revised full-year delivery guidance of 40,000 to 46,000 vehicles, down from an earlier forecast of 46,000 to 51,000.
The company recently unveiled its second-generation quad-motor EV powertrain, boasting 1,025 horsepower, 1,198 lb-ft of torque, and acceleration from 0 to 60 mph in just 2.5 seconds.
The new R1T and R1S models, with ranges of up to 400 miles in conserve mode, begin deliveries this month with starting prices north of $115,000.
Mixed financial picture and new investments highlight Rivian’s volatility
While Rivian continues to face profitability challenges, posting a gross profit margin of -9.33%, its liquidity position remains strong, with a current ratio of 3.73.
The company has also secured a $1 billion equity investment from Volkswagen Group as part of a $5.8 billion technology joint venture, signaling strategic support despite current headwinds.
The investment is expected to support Rivian’s technology platform expansion, while the company also benefits from momentum in affiliated ventures.
Notably, Rivian-backed startup Also Inc. reached a $1 billion valuation following a $200 million funding round led by Greenoaks Capital.
As analysts continue to express skepticism over Rivian’s near-to-medium-term growth prospects, especially in light of changing regulatory conditions, the company’s future will likely depend on its ability to deliver on its next-generation models while managing cost structures and navigating a tougher macroeconomic environment.
The post Rivian faces downgrades and demand concerns amid EV incentive cuts appeared first on Invezz
