Why Is Wall Street So Bearish on Rivian? There's 1 Key Reason.
Key Takeaways
Rivian and the rest of the EV industry are dealing with several challenging regulatory shifts.
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Quick insights and key information
2 min read
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investment
Article classification
July 27, 2025
07:15 AM
The Motley Fool
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The re indicates that Interestingly, The average price target from Wall Street analysts for Rivian Automotive (RIVN 1. 38%) stock is just $14
That implies just 5% in potential upside over the next 12 months
In contrast, One analyst even downgraded the stock to a "sell," predicting 50% in potential downside
However, Why is Wall Street so bearish
Market analysis shows re's one obvious cause
Expect EV stocks to feel the pain It's not a good time to be an electric car stock, in light of current trends
Government is preparing to eliminate several key subsidies
The electric vehicle (EV) buyer tax credit -- which can effectively reduce the cost of buying an EV by as much as $7,500 -- is set to expire in September
Federal automotive regulatory credits, which have vided the industry with hundreds of millions of extra fit, will also cease to be of any value this year since penalties for non-compliance will be eliminated (an important development), given current economic conditions
Rivian's new mass market vehicles -- the R2, R3, and R3X -- were all expected to qualify for federal tax credits, given current economic conditions
This tells us that company also earned roughly $300 million in the last quarter of 2024 alone from selling automotive regulatory credits
While much of that income will remain from state sources, federal sources will ly be non-existent in 2026 (noteworthy indeed)
Additionally, Both of these factors will cause direct and immediate pain for Rivian, but also for competitors Tesla and Lucid Group
Investors in any of these companies should be paying close attention
Image source: Getty Images
In contrast, When analysts at Guggenheim downgraded Rivian stock in July, they cited "reduced confidence in demand and the impact of weaker electric vehicle (EV) incentives, in light of current trends. " This comes right as Rivian attempts to market its new models, all of which are expected to debut under $50,000
Sales should still spike due to these duct introductions (which is quite significant)
But expect the sales launch to be weaker than previously anticipated
Long term, Rivian s remain mising
However, the path to renewed growth just got a bit longer, in this volatile climate.
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