Core Insights - Rivian has reported a revenue beat, attributed to the expiration of electric vehicle (EV) credits, which has positively impacted its stock performance [1] Group 1: Financial Performance - The company achieved a revenue that exceeded market expectations, indicating strong demand for its electric vehicles [1] - The expiration of EV credits has played a significant role in driving revenue growth, suggesting a strategic advantage in the current market environment [1] Group 2: Market Reaction - Following the revenue announcement, Rivian's stock experienced an upward movement, reflecting investor confidence in the company's financial health and future prospects [1]

Core Insights - General Motors Co. (GM) CFO Paul Jacobson highlighted that emissions regulations and EV credits have led competitors to sell electric vehicles (EVs) at lower prices during the third-quarter earnings call [1] - There has been a notable decline in demand for EVs since the termination of the $7500 Federal EV Credit by President Donald Trump, prompting some competitors to sell EVs at minimal prices to secure environmental credits [2] - GM reported a $1.6 billion charge related to EVs, with $1.2 billion attributed to adjustments in EV capacity [3] - GM has retracted its plans to extend EV incentives after the September 30 deadline, which included making down payments to dealers to qualify inventory for the EV credit [4] - Following GM's decision, Ford Motor Co. also rolled back its planned incentives after concerns were raised by Senator Bernie Moreno [5]

Core Viewpoint - U.S. franchise auto dealerships are showing solid momentum despite tariff challenges and the expiration of EV credits, with demand remaining better than expected in the near term [1][2]. Demand and Affordability - Retail new-vehicle sales are experiencing mid- to high-single-digit growth in Q3, driven by stable consumer spending and limited price increases from OEMs despite tariffs [4]. - The expiration of certain EV incentives has accelerated demand, increasing the battery-electric vehicle mix to approximately 10% in the current quarter, up from about 7% in the previous quarter [4]. Inventory and Profitability - Inventory levels and days' supply are stable, contributing to a gradual normalization in gross profit per unit (GPU) rather than a sudden reset [5]. - Used vehicle volumes remain strong, and service lanes are experiencing healthy traffic and pricing, indicating the resilience of higher-margin fixed operations [5][7]. Market Outlook - JPMorgan has raised its Q3 estimates for U.S. franchise auto dealers, projecting about 2% above previous estimates and roughly 7% above consensus [6]. - The bank's top picks include Lithia & Driveway and AutoNation, while noting potential impacts from a recent cyber incident affecting some U.K.-exposed operators [6]. Future Risks - Looking beyond Q3, there are increasing risks to demand and GPUs as EV credits phase out and tariffs are fully reflected in vehicle prices, alongside a softening labor market in key regions [8]. - JPMorgan forecasts a U.S. SAAR of approximately 15.5 million in 2026, slightly down from 16.0 million in 2025, with potential upside if trade outcomes with Canada and Mexico improve [8].