Rivian, Lucid Stocks Sink After Trump Win: What's Driving Bearish Move?

Rivian Automotive, Inc. RIVN and Lucid Group, Inc. LCID shares are down sharply on Wednesday following the election of Donald Trump as the 47th president of the U.S. Here's a look at how Trump's policy could affect the electric vehicle makers. 

What To Know: Trump has largely condemned EVs, claiming they are being forced on consumers through unfair regulations, and has pledged to end what he calls "the electric vehicle mandate." 

Trump has specifically said he plans to eliminate many EV incentives included in the Biden administration's Inflation Reduction Act (IRA), including purchase rebates and tax incentives. He also has said he plans to modify or end vehicle emissions standards under the Environmental Protection Agency.  

Read Next: What Does Trump’s Victory Mean For EV Giant Tesla And The Big 3 Automakers?

EV start-ups such as Lucid and Rivian already face decreasing consumer demand for electric vehicles and Wedbush analysts see the Trump presidency as another challenge for carmakers.

"We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled," the Wedbush analysts wrote.

Rivian announced plans for a new more affordable model, the R2, set to launch in 2026. The R2 was set to be priced beneath limits to qualify for the full $7,500 federal tax credit. Trump’s planned elimination of the tax credit could potentially disrupt these plans.

Trump has also proposed a universal 10% tariff on imports and a 60% tariff on imports from China which could affect Rivian and Lucid's supply chains and production costs, potentially leading to higher vehicle prices or reduced profit margins. Neither Rivian nor Lucid has yet to turn a profit and reduced profit margins would push the road to profitability out further. 

While Rivian and Lucid stock is down, Telsa Inc. TSLA stock is soaring. Unlike the other two companies, it should have the size and scale to absorb potential policy changes. 

RIVN, LCID Price Action: According to Benzinga Pro, Rivian shares are down 9.02% at $9.64 and Lucid shares are down 5.94% at $2.12 at the time of publication Wednesday. 

Read More: 

• Trump’s Big Tech Policies: What GOP Victory Means For Apple, Google, Microsoft

Photo: Courtesy of Rivian Automotive, Inc.