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Barclays Downgrades Rivian Automotive: Will Demand Pressure Spell Disaster for EV Maker?

ByEditor

Feb 12, 2024
Barclays cuts Rivian Automotive citing technology shortcomings in facing the EV market downturn

Barclays downgraded Rivian Automotive (RIVN) to Equal-Weight from Overweight in a note on Monday, with the stock price target lowered to $16 per share. The analysts cited three factors for their downgrade.

Firstly, they noted that while Rivian has a great product, its technology may not be enough to avoid increased signs of demand pressure amid a broader EV slowdown. Secondly, the bank believes that demand softness implies risk from pricing and slower volume growth. Finally, the analysts pointed out that recent data points from the sales of R1S inventory units and the accelerated launch of a Standard range version suggest softened demand.

Despite hopes that demand would remain resilient for R1S last year, signs of demand weakness in EDV and R1T emerged, raising concerns about future performance. Barclays also sees an ongoing need for capital raises at Rivian, with weak demand presenting a potential pricing risk and challenging the volume outlook. These factors reinforce the analysts’ conclusion that it is likely that RIVN will miss its 2024 target of reaching gross margin profitability.

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