Why Rivian Stock Is Down By 11% Today

Rivian Stock Falls After Company’s First Quarterly Report

Shares of Rivian Automotive found themselves under strong pressure after Rivian released its first earnings report as a public company.

The company reported revenue of $1 million and a GAAP loss of $12.21 per share, missing analyst estimates on earnings and meeting them on revenue.

Rivian announced that it had 71,000 R1 net preorders in the U.S. and Canada. As of December 15, 2021, Rivian produced 652 R1 vehicles and delivered 386 of those. Rivian has also stated that it planned to increase its annual production capacity to 200,000 per year at its factory in Normal, Illinois. The company also plans to have an annual capacity of 400,000 vehicles in its Georgia facility.

The company’s plans look impressive, but the market focused on the current deliveries. Ramping up production from low levels is notoriously difficult, and it remains to be seen whether Rivian will be able to meet its goals in the upcoming years.

What’s Next For Rivian Stock?

Rivian stock made an attempt to settle above the $180 level a few days after the IPO but lost momentum and moved below the $100 level after the release of the earnings report.

The high volatility is understandable as Rivian is a story-driven stock. The company’s third-quarter revenue is just $1 million, and its ability to survive and thrive depends on its success in ramping up production.

Judging by the recent performance of smaller EV names like Lordstown Motors, NIO, Lucid Group, as well as the performance of Tesla stock, traders have become concerned about the high valuation of the whole EV segment at a time when central banks look ready to raise rates.

In this light, the near-term dynamics of Rivian stock will also depend on general market sentiment towards EV producers while traders will wait for the future production updates from the company.

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