Shares of Rivian Automotive (NASDAQ: RIVN) climbed 10% today to start the trading week. The stock did not hold onto those gains, but was still up 6.6% as of 2 p.m. ET Monday. The company provides its second quarter financial and operational update this Thursday, August 11. But that’s not what prompted investors to increase their stocks today.
Rivian already has around 90,000 pre-orders for its R1T pickup truck and R1S SUV. It expects to be able to produce only 25,000 vehicles this year due to parts shortages. But while the new legislation helps boost long-term demand, investors see it as a positive development for Rivian and other early-stage EV makers.
But the surge in Rivian shares this morning was also tempered by the fact that the company announced that certain provisions of the climate agreement could put it at a disadvantage compared to its competitors. The text of the legislation limits electric truck and van tax credits to those costing less than $80,000; Rivian’s R1T pickup truck starts at $67,500 (options may increase the price). The legislation limit is $55,000 for cars, and the base price of the R1S SUV is $72,500.
The company expressed its dissatisfaction with these cost caps in a statement reported by The Wall Street Journal. He argues that higher prices will come down if the company is able to build a larger customer base, but that the provisions would hurt that.
This could help explain why the stock has lost nearly half of its early gains today. When Rivian releases its second quarter earnings update this week, management will surely have more to say on the matter then.
10 Stocks We Like Better Than Rivian Automotive, Inc.
When our award-winning team of analysts have stock advice, it can pay to listen. After all, the newsletter they’ve been putting out for over a decade, Motley Fool Equity Advisortripled the market.*
They just revealed what they think are the ten best stocks investors can buy right now…and Rivian Automotive, Inc. wasn’t one of them! That’s right – they think these 10 stocks are even better buys.
View all 10 stocks
* Portfolio Advisor Returns as of July 27, 2022
Howard Smith has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.