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Tuesday, January 18, 2022

Rivian stocks skid as legacy automakers revise EV goals

Jan 6 (Reuters) – Rivian Automotive Inc. (RIVN.O) stock fell below its IPO price on Thursday in a sell-off with other electric vehicle makers, as the race for market share intensified and legacy companies set their own Accelerated production.

Rivian fell for the first time to $75.13 from its November opening public issue price of $78. The stock pared losses and ended at $87.33, down about 3%.

Competitive EV makers Tesla Inc (TSLA.O), Lordstown Motor (RIDE.O) and Fisker (FSR.N) fell between 2.1% and 3.3%, with high-flying growth stocks under pressure from the US Federal Reserve on expectations. Interest may increase sooner than previously thought.

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“Rivian investors need to manage near-term expectations,” Morgan Stanley analyst Adam Jonas warned in a note to clients. “Tesla has shown us the hard way to accelerate EV manufacturing. You can’t get a reward without pain.”

Jonas rated Rivian’s stock “overweight.”

Rivian stock is down about 14% since early Wednesday, when Amazon.com Inc., one of Rivian’s biggest investors, said it has teamed up with carmaker Stellantis NV (STLA.MI). .

The two companies will develop cars and trucks with Amazon software and deploy electric vans made by Stelantis on Amazon’s delivery network. read more

US shares of Stelantis 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 commercial vehicle business, a key market for Rivian, is becoming more crowded.

Rivian said Thursday that it expects Amazon to buy vehicles from multiple providers and that its partnership with Amazon remains intact.

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General Motors Company’s (GM.N) electric commercial vehicle business, Brightdrop, has inked deals with Walmart Inc. (WMT.N) and FedEx Corp (FDX.N), while its e-transit cargo from Ford Motor (FN) Delivery expected. Vans to customers this year.

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

Ford’s stock is up 18% to date and is now at its highest level since 2001. GM has grown by 7% in 2022.

“(Rivian) investors are probably being held back by the legacy industry,” said Sam Abuelsamid, analyst at Guidehouse Insights.

Ford, GM beat Rivian in market value

Rivian, which posted a loss of $1.2 billion in the third quarter, expects to deliver cars to customers this year. Production at its second plant in Georgia, in which it has invested $5 billion, is only expected to begin by 2024.

“It’s still unproven in terms of investing in stocks versus some other names like Tesla and 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 Dutta, and Noel Randevich in Oakland, Calif. Editing by Nick Ziminsky and Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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