Rivian Automotive (NASDAQ:RIVN) The stock slipped 6.7% by midday ET on Thursday – but not because of a mistake Rivian made.
This time it’s the fault Ford Motor Company (NYSE:F)which just declared a price war on electric trucks, turning Rivian shares into roadkill in the process.
Have you driven a Ford lately? (Because it’s cheaper than before)
Every day, Ford arch-rival General Motors (NYSE:GM) will begin selling its new Silverado EV electric pickup truck to compete with the Ford F-150 Lightning. However, Ford saw its automotive rival getting closer and closer in the rearview mirror and is putting the pedal to the metal to stay on top – cutting the price of some F-150 Lightning models by as much as $5,500, CarsDirect.com reported this week .
It’s not entirely clear whether this move will be enough to maintain Ford’s lead over Chevy. What’s notable is that the lowest trim “Pro” F-150 Lightning still costs a hefty $54,995, and the most expensive “Platinum” Lightning still costs a whopping $84,995. (The price reductions only apply to mid-range vehicles). What Is It’s clear that Ford’s preemptive strike against Chevy and the associated price war appear to be unsettling investors in Rivian.
Is Rivian Stock a Sell?
So how worried should Rivian investors be? Honestly, until we can see the new Silverado EV in person and say how well it compares to the Rivian R1T, or if it’s even aimed at the same type of truck buyer market, it’s hard to say. But given Rivian’s struggles with growing demand for its electric vehicles over the last year, and the fact that the starting price of its R1T electric truck is already higher than most Ford F150 Lightning trims, there’s likely the potential for more competition from General Motors and Lower Prices at Ford That’s not good news for Rivian.
Long story short: Rivian’s job just got harder. And if the company has to cut prices to compete in the price war with Ford and Chevy, its path to profitability has probably become a little longer, too.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends General Motors and recommends the following options: Long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
Why Rivian Stock Got Wrecked Today was originally published by The Motley Fool