Feb 13 (Reuters) – Rivian’s projection that its cheaper models would attract more buyers this year powered a 24% stock jump on Friday, the latest sign of electric vehicle makers betting on affordable cars to revive sales after a key federal subsidy expired.
The company plans to roll out a new R2 model in the second quarter starting at nearly $45,000, similar to Tesla’s Model Y, marking a significant step down from the high-end R1 family of vehicles that Rivian is known for.
Rivian’s move is part of a broader shift in the industry this year, with automakers pursuing lower-priced models to drum up demand after EV sales took a hit from the expiry of the $7,500 tax break and other Trump administration policy changes.
“For the stock itself, nothing matters more than a timely launch for the R2 SUV, and in this regard, Rivian remains essentially on track,” Piper Sandler analysts said.
Following the policy changes, several companies scaled back EV production and pivoted to hybrid and gas-powered vehicles, with some like Ford and General Motors taking billions of dollars in associated write-downs. Yet, they have kept their affordable EV plans intact.
Ford is now focused on speedy development of its $30,000 EV model, while GM has brought back its affordable Bolt EV starting at just under $30,000. Tesla said it would stop selling its high-end Model S sedans and Model X SUVs following the rollout of stripped-down variants of the mass-market Model Y SUVs and Model 3 compact sedans.
Lucid, known for its luxury electric Air sedans and Gravity SUVs, has also launched cheaper variants.
For Rivian, which remains unprofitable, the R2 SUVs are expected to drive a 53% jump in 2026 deliveries to between 62,000 and 67,000 vehicles. That compares with estimates of 64,130 vehicles, according to Visible Alpha data.
“Rivian has had its fair share of problems on its journey to be a major player in the EV world, yet its fourth quarter results would suggest the business is finding its groove,” said Dan Coatsworth, head of markets at AJ Bell.
If the premarket trading gains hold, Rivian is set to add more than $4 billion to its market value of $17.16 billion.
The company’s stock soared more than 48% last year, partly due to optimism around R2. But overall EV sentiment remains subdued this year, dragging Rivian’s stock down 29%, while Tesla has fallen around 7%.
(Reporting by Deborah Sophia and Joel Jose in Bengaluru, and Abhirup Roy in San Francisco; Editing by Leroy Leo)
Comments