Why Rivian Stock Plummeted This Week

Shares of Rivian Automotive (NASDAQ: RIVN) slipped this week. The firm's stock lost 10.1% as of market close, but was down as much as 12.2% earlier in the week, according to data from S&P Global Market Intelligence. The leg down comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq-100 gained 1.7% and 1.6%, respectively.

President Trump announced early into his presidency that he would roll back specific Biden-era EV-boosting initiatives. The president made it clear that his administration would take a much different approach to green initiatives in general.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Trump axes EV tax credit

In one of his many executive orders, President Trump will end the $7,500 tax credit President Biden initiated for those buying EVs, claiming he is ending the "electric vehicle mandate." When news broke of the order, EV stocks were hit badly, Rivian among them.

Beyond the mandate, Trump is ending support for EV charging stations, a critical link in the widescale adoption of EVs, as well as funding for battery research. It remains unclear, however, if President Trump even has the power to roll back many of the initiatives he wishes to, including the credit, which was passed by Congress. For now, however, the future for Rivian and other EV makers is cloudy.

The CEO is optimistic that any impact will be minimal

It's a CEO's job to remain undaunted, but Rivian's CEO RJ Scaringe made it clear after the announcement that although Trump's actions have introduced more uncertainty, Rivian is far from doomed. He stated that the removal of the tax credit will force the company to explore making lower-priced vehicles, something many investors think is key to Rivian's success.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $381,744!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,357!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $531,127!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of January 21, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.