A shifting perspective on the electric vehicle market as we head towards 2025 has prompted Baird to reconsider its position on Rivian. The firm downgraded its rating of the EV startup’s stock from “outperform” to “neutral” and adjusted its price target, trimming it by $2 to $16. Despite this adjustment, there’s still an anticipated upswing of nearly 9% from Tuesday’s closing figures. It’s noteworthy that Rivian’s shares have seen a remarkable rise of about 46% over the past month.
Back in November, Rivian secured a conditional commitment for a substantial loan, potentially up to $6.6 billion, from the Department of Energy. This funding is aimed at supporting the development of a new EV manufacturing plant in Georgia. Meanwhile, Volkswagen also ramped up its investment in Rivian to the tune of $5.8 billion to bolster their joint venture focused on next-generation electrical architecture and software for electric vehicles. Analyst Ben Kallo shared insights with clients on Wednesday, highlighting that “With the Volkswagen partnership now finalized and the DOE funding already announced, there aren’t many catalysts expected to drive growth in 2025. We suspect the stock may falter alongside anticipated sluggish EV sales.”
Kallo expressed continued confidence in Rivian’s brand and product over the long term, despite short-term challenges. Looking ahead to the coming year, he noted a few industry-wide obstacles, notably potential policy shifts under President-elect Donald Trump’s administration. Changes could potentially threaten existing incentives, such as tax credits that have supported new EV purchases. “Though there are exceptions, we foresee a tougher environment for EVs and renewable sectors in the near future. The uncertainty surrounding the [Inflation Reduction Act] adds another layer of complexity to the growth prospects for 2025,” Kallo added.
In terms of Wall Street’s outlook on Rivian, opinions are mixed. According to LSEG data, half of the 30 analysts who cover Rivian have given it a strong buy or buy rating. Yet, their average price target of $15.11 suggests a modest upside of approximately 3%. Following the latest insights from Baird, Rivian’s shares dipped by over 1% in premarket trading on Wednesday. It’s also important to mention that the stock has experienced a decline of more than 37% throughout this year.
