Rivian and Lucid Stocks Plunge After Trump's Election: Analyzing the Impact on EV Manufacturers

Rivian Automotive, Inc. (RIVN) and Lucid Group, Inc. (LCID) are experiencing significant declines in their stock prices following the election of Donald Trump as the 47th president of the United States. Let’s explore how Trump’s policies could influence the operations of these electric vehicle makers.

The Political Landscape: Trump has expressed a critical stance towards electric vehicles (EVs), alleging that they are imposed on consumers through unjust regulations. He has promised to revoke what he terms "the electric vehicle mandate".

One of the key issues is Trump's intention to abolish several EV incentives established under the Biden administration’s Inflation Reduction Act (IRA), which includes purchase rebates and tax incentives aimed at encouraging EV adoption. Additionally, he has indicated plans to either modify or eliminate vehicle emissions standards enforced by the Environmental Protection Agency (EPA).

The Industry Response: Analysts at Wedbush have noted that the Trump presidency could represent a major hurdle for EV manufacturers like Rivian and Lucid. They argue that revocation of EV rebates and tax incentives would be detrimental, further undermining a market already facing dwindling consumer interest.

Rivian recently announced plans to introduce a more budget-friendly model known as the R2, aimed for launch in 2026. This new vehicle was designed to fall below price thresholds qualifying for the full $7,500 federal tax credit. However, proposed changes to eliminate this tax credit could jeopardize these plans.

In addition to potential changes in tax policy, Trump has suggested implementing a universal 10% tariff on imports, alongside a severe 60% tariff on goods imported from China. Such tariffs could significantly disrupt the supply chains and production costs for Rivian and Lucid, potentially leading to increased vehicle prices and tighter profit margins, a critical concern given that both companies are yet to achieve profitability. Any reduction in profit margins would likely extend the timeline for these companies to become profitable.

While Rivian and Lucid stocks decline, Tesla Inc. (TSLA) is experiencing strong stock performance. Unlike Rivian and Lucid, Tesla has the size and scale necessary to navigate potential shifts in policy more effectively.

Current Stock Performance: As of midweek, Rivian shares have dropped by 9.02% to $9.64, while Lucid shares are down 5.94% to $2.12.

Conclusion: The landscape for electric vehicle manufacturers could become more challenging following Trump's victory, with changes in incentives and tariffs likely to impact operations and profitability.

Rivian, Lucid, Trump