A Little Bad News for Rivian and Lucid

Industry Overview - The electric vehicle (EV) market is experiencing a slowdown in consumer interest, with only 16% of respondents likely to purchase an EV as their next vehicle, the lowest level since 2019 [3] - The percentage of consumers who believe most cars will be electric within the next decade has decreased from 40% in 2022 to 23% in 2023 [3] Consumer Sentiment - There is growing pessimism regarding battery repair costs, total costs, and charging infrastructure, with 62% citing high battery repair costs and 59% mentioning purchase price as reasons for avoiding EVs [4] - The average transaction price for a new EV in March was $59,205, significantly higher than the overall average transaction price of$47,462 [5] - Concerns about running out of charge while driving and the lack of convenient public charging stations were noted by 56% and 55% of respondents, respectively [5] Legislative Impact - The Trump administration's budget bill aims to reduce federal incentives for battery manufacturing and could eliminate the $7,500 EV tax credit if approved by the Senate [6] - The bill also proposes new taxes of$250 for EV owners and $100 for hybrid owners to support infrastructure [7] Company-Specific Insights - Rivian is entering 2025 without major vehicle launches and stagnating deliveries, lacking visible catalysts for growth [1] - Lucid Motors has achieved six consecutive quarters of record deliveries and is ramping up production of its new Gravity SUV, providing some momentum despite the overall decline in consumer sentiment [1][11] - Investors in Rivian should look for buying opportunities as the company awaits the R2 launch, while Lucid's ongoing production increases may help sustain its growth [10][11] Market Dynamics - Despite the decline in consumer sentiment, first-quarter data showed a 16% growth in EV registrations and an increase in market share from 6.9% to 7.7% year-over-year, driven by demand pull-ahead effects [9]