Rivian shares are falling, while older carmakers are turning up electric cars

A Rivian R1T pickup, the Amazon-backed electric car maker (EV), is being driven off the Nasdaq Market during the company’s listing on Times Square in New York City, USA, on November 10, 2021. REUTERS / Brendan McDermid

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January 6 (Reuters) – Shares in Rivian Automotive Inc (RIVN.O) fell briefly below their listing price on Thursday in a broader sale among electric car manufacturers as the race for market share intensifies with older companies increasing electric car production.

Rivian shares fell as much as 16.5% to $ 75.13, falling for the first time below the $ 78 debut price. They offset losses and traded down 5% to $ 85.66 in the middle of the day.

Other electric car manufacturers Tesla Inc (TSLA.O), Lucid Group (LCID.O) and Fisherman (FSR.N) also lost ground, where the valuation of the high-flying technology sector came under pressure in the wake of the Federal Reserve’s hawkish signals.

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The drop in Rivian shares comes the day after one of its biggest investors, Amazon.com Inc., merged with carmaker Stellantis NV (STLA.MI).

They will develop cars and trucks with Amazon software and install electric vans made by Stellantis on Amazon’s delivery network. Read more

“Amazon has invested a lot of money in Rivian … It was a key factor for many people to demonstrate that this is a viable company that has a product that may be relatively unique in the market,” said Guidehouse Insights analyst Sam Abuelsamid .

Rivian and Amazon had signed a contract in 2019 to build 100,000 electric vans for the e-commerce giant by 2025. But now the electric commercial vehicle business, a key market for Rivian, is flooded with more options.

General Motors (GM.N) electric commercial vehicles, BrightDrop, has signed agreements with Walmart Inc. (WMT.N) and FedEx Corp (FDX.N), while Ford is expected to deliver its E-Transit van to customers this year.

Deutsche Bank analyst Emmanuel Rosner said the decline in Rivian shares indicates that investors may have assumed that Amazon would primarily rely on Rivian vans for its electric car fleet, and perceived the latest announcement as reducing their options.

Meanwhile, General Motors (GM.N) announced the launch of its electric Chevrolet Silverado pickup and Ford (UN) increases production of the F-150 Lightning, both pick-up trucks that would compete with the Rivian’s R1T, at a time when it’s struggling to stick to delivery dates due to supply chip limitations.

“Investors will probably be a little appalled that the old industry is making a comeback,” Abuelsamid said.

Ford, GM overtakes Rivian in market value

Rivian, which still has no noticeable sales, is expected to deliver cars to customers this year. Production at its second plant in Georgia, in which it has invested $ 5 billion, is not likely to begin until 2024.

“It’s still kind of unproven in terms of the investability of it as a stock compared to some of the other names like Tesla and arguably Ford,” said David Keller, chief marketing strategist at StockCharts.com.

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Reporting by Nivedita Balu and Akash Sriram in Bengaluru, Further reporting by Eva Mathews and Tiyashi Datta; Edited by Ramakrishnan M. and Arun Koyyur

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