Why Rivian Could Tank Another 50%

Core Viewpoint - Rivian Automotive is facing increasing challenges, including potential tariffs on imported components, which could significantly impact its financial outlook and delivery forecasts [1][2][3]. Group 1: Financial Outlook - Bernstein analysts maintain an underperform rating with a price target of $6.10, indicating a nearly 50% decline from the current share price of $11.49 [2]. - The adjusted EBITDA forecast is now expected to reach negative $2.2 billion, which is 17% worse than Rivian's current projections [5]. - The delivery forecast for 2025 has been cut to 37,000 units, a 20% reduction from Rivian's guidance, reflecting recent delivery softness [4]. Group 2: Tariff Implications - Rivian imports crucial components, such as batteries from South Korea and China, making it vulnerable to a 25% tariff on key auto parts set to be implemented in May [3]. - The potential tariff effects are contributing to the bearish sentiment surrounding the company's financial health [2]. Group 3: Strategic Concerns - Analysts express doubts about Rivian's ability to achieve two consecutive quarters of $50 million in gross profit, which is tied to a significant investment milestone from Volkswagen [7][8]. - Concerns are raised regarding the viability of the Department of Energy loan, as deteriorating financials could jeopardize the funding necessary for Rivian's Georgia plant [8]. Group 4: Joint Ventures and Partnerships - The joint venture with Volkswagen, valued at up to $5.8 billion, is seen as a critical component for Rivian's future, but its success is now in question due to the company's financial challenges [6][8]. - The DOE's commitment for a $6.6 billion loan is also under scrutiny, as financial instability could delay essential funding [8].