Today, shares of Rivian (RIVN -9.10%) were trending downward, possibly in response to a Wall Street Journal article that provided additional evidence that the market for electric vehicles (EVs) is declining.
The price of EV stock was down 6.7% as of 12:38 p.m. ET. At the same time, Tesla (TSLA -4.78%) stock was down 3.9%, and fellow EV start-up Lucid Motors (LCID -9.40%) was down 8.5%.
Sales of EVs are declining
The Wall Street Journal reported last night that General Motors (GM -2.80%) is delaying the inauguration of a major factory for electric pickup trucks in Michigan. It’s the newest indication of the auto industry’s waning enthusiasm for electric vehicles, as consumer demand appears to be declining now that early adopters have already bought EVs. The launch of a new plant will be delayed by a year, according to General Motors, in order to “better manage capital investment and align with evolving EV demand.”
The announcement comes after Ford decided earlier this week to reduce staffing at its Lightning EV production by one shift due to waning demand. While costs have decreased in the sector, there are indications that stocks of electric vehicles are growing.
Today, some company-specific news was also published on Rivian. As part of its agreement to purchase 100,000 vans from Rivian by 2030, Amazon announced that it had taken delivery of 10,000 electric delivery trucks.
The company’s $1.5 billion capital raise earlier this month, according to CEO RJ Scaringe, didn’t signal any business-related worries. Instead, the move was made to provide a cushion while the corporation started setting up factories for its smaller R2 vehicles, he added.
Does Rivian stock have a problem?
Rivian and the rest of the industry are undoubtedly concerned by the indications of declining EV demand. Investors were heartened by the company’s recent announcement of strong production and delivery figures for the third quarter. The stock’s price is based on the assumption that the EV sector would continue to grow and eventually supplant conventional combustion vehicles, despite the fact that the company is presently extremely unprofitable.
When Tesla reports its earnings this afternoon after business hours, we’ll hear more about the state of the sector. On the news tomorrow, Rivian stock is likely to change, particularly if the EV market leader reports additional indications of waning demand.
Should you make a $1,000 investment in Rivian Automotive at this time?
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