Rivian Automotive - Another EV Tale Of Woe?

06/09/22 04:26:16 PM

by Matt Blackman

Being first to market isn't all it's cranked up to be.

Security: RIVN
Position: N/A

Rivian came to market on November 9, 2021 with such promise and fanfare. Car and Driver magazine rated it first ahead of the Ford F-150 Lightning and GMC Hummer, earning it the coveted Editor's Choice Award. As the first mass produced electric pickup truck to hit the market, it beat out competitors Tesla, Ford, GM and European manufacturers to put trucks in consumers' garages.

Opening at $106.75, the stock briefly dropped below $100 before hitting a high of $174.97 just three trading days later. Large players including General Motors and Amazon seemed eager to participate with Amazon contracting the company to build 100,000 battery-powered delivery vans by 2030. Both Ford and GM vied to invest with Ford winning the bid and agreeing to invest $500 million in the company in 2019.

Figure 1. Daily chart Rivian Automotive since its NASDAQ launch.

Graphic provided by: TradingView.

So what has caused RIVN to drop more than 80% since its debut? Raising the cost of its RT1 pickup 17% for reservation holders and a lawsuit with seat supplier Commercial Vehicle Group haven't helped. Then in May, Ford sold 15 million RIVN shares dropping its stake to under 10%. Amazon reportedly has an 18% stake in Rivian but it is also looking elsewhere to electrify its fleet according to Investor.com.

Technically, the RIVN chart looks like a ski slope to nowhere putting a series of lower lows and lower highs with no signs of hitting any kind of bottom. Any RSI buy signal has proven short lived as we see from the chart above. And ignoring sell signals has been a very painful experience indeed!

Figure 2. Rivian Automotive compared to its EV peers including Global X Autonomous & Electric Vehicles ETF (DRIV), Tesla (TSLA) Lucid Automotive (LCID), and Workhorse Group (WKHS).

Graphic provided by: TradingView.

But markets have been challenged since December 2021, especially the electric vehicle sector as Figure 2 shows. Powerhouse EV companies like Tesla are also down more than 30%, with Lucid Automotive and Workhorse down more than 60%.

Can Rivian recover or will the company follow in the footsteps of troubled truck maker Nikola Corporation (NKLA) which has seen shares shed more than 90% from its highs?

On the positive side, it's interesting to note that Global X Autonomous & Electric Vehicles ETF (DRIV) off 27% has been the best performing EV stock so far in 2022 so may be a safer and more diversified bet on the sector going forward.

Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. Matt has earned the Chartered Market Technician (CMT) designation. Follow Matt on Twitter at www.twitter.com/RatioTrade

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Rivian Automotive - Another EV Tale Of Woe?

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