What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) fell 2.5% in the morning session after reports surfaced that its software joint venture with Volkswagen had run into significant problems, creating delays for the German automaker's new electric models.
According to Germany's Manager Magazin, Audi's Q8 e-tron and electric A4 models faced delays of at least a year, while Porsche's electric K1 SUV was postponed indefinitely. This development cast a shadow over a key strategic partnership for the electric vehicle maker. Compounding the negative sentiment, Rivian also lowered its full-year delivery forecast to between 40,000 and 46,000 vehicles, a drop from the 51,579 units delivered in 2024. The company also widened its projected EBITDA loss for 2025 to a range of $2 billion to $2.25 billion, signaling deeper financial headwinds ahead.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Rivian? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 21 hours ago when the stock gained 5.4% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points yesterday and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets.
This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels. The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
Rivian is up 8.1% since the beginning of the year, but at $14.32 per share, it is still trading 15.4% below its 52-week high of $16.92 from May 2025. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $142.16.
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