Shares of Rivian Automotive (NASDAQ: RIVN) slumped today and were trading nearly 7% lower as of 1:30 p.m. ET Tuesday. With Donald Trump taking the oath of office on Monday and revoking as many as 78 executive orders signed by his predecessor Joe Biden — including one on electric vehicles (EV) — investors in Rivian are feeling jittery.
Among several other orders signed by Biden, President Trump revoked a 2021 executive order on Monday that set a goal of 50% of all new vehicles sold in the U.S. to be electric by 2030. Trump also halted the distribution of the remaining $5 billion in funds for EV charging infrastructure, and may remove the $7,500 federal tax credit available on some EV purchases.
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In short, while Biden’s EV goals were part of his big plans to fight climate change and provided a huge impetus to the EV industry, Trump’s moves could slam the brakes on the industry. That’s spooking investors in Rivian, who were finally turning hopeful about the company after a long wait.
Rivian’s production woes are far from over. Earlier this month, Rivian said it produced only 49,476 vehicles in 2024, down nearly 14% from 2023. Its deliveries of 51,579 units last year were up only about 3% from 2023.
However, Rivian also said that a component shortage isn’t a constraint anymore, which means its production could rise in 2025. It also expects to turn a positive gross profit in the fourth quarter (it will report its Q4 numbers on Feb. 20).
Meanwhile, Rivian received a loan commitment of up to $6.6 billion from the Department of Energy earlier this month to build a factory in Georgia. It also recently formed a joint venture with its long-standing partner and auto giant Volkswagen, where the latter will invest up to $5.8 billion in the EV maker.
Investors in Rivian, therefore, had valid reasons to turn optimistic about the company’s future. Trump’s anti-EV stand, however, could cut short their expectations and hopes.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.
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