Rivian's Stock Hits a Record Low as Electric-truck Price Competition Heats Up

Rivian Automotive Inc. witnessed its shares plunging to a new record low, as the arena for electric trucks braces for intensified competition following Ford Motor Co.'s announcement of price reductions.

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Ford's decision to adjust pricing for its F-150 Lightning electric pickups, specifically for the model-year 2024 variants, was confirmed by a spokesperson who emphasized the company's strategy to adapt to market dynamics in order to strike the right balance between sales growth and customer value.

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This move by Ford has sparked concerns among investors on Wall Street, who fear that the introduction of lower-priced electric trucks from a major player like Ford could significantly heighten competitive pressures on Rivian's business.

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Rivian's shares, trading under the ticker symbol RIVN, witnessed a sharp decline of 6.8% during Thursday's session, culminating in a closing price of $9.57, marking both a new record low and the stock's first such low since February. Over the span of the past two trading sessions, Rivian shares have shed approximately 10% of their value.

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As part of Ford's adjustments, the XLT variant is slated to undergo a price reduction of $2,000, bringing its price tag down to $62,995. Similarly, the Flash trim will see a price decrease of $5,500, resulting in a new price of $67,995, while the Lariat variant will witness a roughly 3% drop in price to $76,995. However, Ford has chosen to keep the prices of its PRO and Platinum lineups unchanged. Reports of these impending price cuts were initially disclosed by CarsDirect earlier on Tuesday.

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In contrast, Rivian's R1T vehicle starts at $69,900, while its R1S model begins at $74,900, according to information provided on the company's website. It's worth noting that the offerings from Rivian are not directly comparable to Ford's electric pickups, as Rivian's vehicles are positioned more as adventure-oriented luxury trucks and SUVs, boasting features tailored towards outdoor enthusiasts.

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Despite these distinctions, the electric vehicle (EV) market is currently grappling with waning demand and escalating competition. Consequently, the prospect of more aggressive pricing strategies from a rival electric-truck manufacturer like Ford has instilled a sense of unease among Rivian investors.

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Thursday witnessed a broader downturn in EV stocks, with Lucid Group Inc. shares also hitting a new low of $2.50, representing a decline of 5.7%. Additionally, Nikola Corp. shares plummeted by 27% subsequent to the company's proposal of a reverse-split plan to shareholders, as detailed in a proxy filing.

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