DA Davidson downgraded Rivian to Underperform on Tuesday, warning that the EV maker’s upbeat tone on its forthcoming R2 model masks significant execution risks.
Analyst Michael Shlisky cut the firm’s rating from Neutral and lowered its price target to $14 from $15, citing concerns that Rivian must deliver “the best mid-size EV launch since 2021 — without the benefit of tax credits or a mass-channel dealer network.”
Rivian shares were trading 3.3% lower at $17.15 in Tuesday’s session after closing 26.6% higher at $17.72 on Friday.
The stock has surged 20.7% over the past five trading days following better than expected fourth-quarter results, though it remains down 10% year to date.
R2 Launch Risks
Shlisky said the R2 launch expectations of 20,000 to 25,000 units in 2026 are aggressive, noting that only the Ford Mustang Mach-E has come close to that level in its debut year — and it had “the since-ended $7,500 Federal EV credit” and broad dealer support.
“RIVN finally provided its thoughts on the ramp-up of R2 deliveries — if met, the numbers will be impressive, but we see significant risks ahead,” Shlisky wrote before naming them.
“Among them: a hesitant mass-channel consumer; RIVN’s limited number of sales locations; reduced government incentives; and even low oil prices,” the analyst added.
DA Davidson said it is not questioning the quality of the upcoming model.
As reported by EV on February 10, the first media and content creators invited by Rivian to drive the prototype praised the SUV.
“Early reviewers appear to love the vehicle,” the analysts wrote, adding that they expect the R2 to integrate autonomy upgrades and follow the strong performance of the R1, whose “acceleration, high-quality interior, and nifty features” impressed the firm.
Still, Shlisky warned that “a lot has to go right” given a hesitant consumer base, reduced incentives, and low oil prices.
“If the R1 is any guide, the R2 will be a very compelling product — however, a lot has to go right for the near-term outlook to be met and we are concerned about headline risk,” Shlisky concluded.
While DA Davidson downgraded the stock, Stifel analyst Stephen Gengaro raised his price target on Rivian to $20 from $17 on Tuesday while maintaining a Buy rating — implying 17% upside from Friday’s close.
R2 Ramp Expectations
On last week’s earnings call, CFO Claire McDonough outlined Rivian‘s expectations for the R2 ramp, telling Wolfe Research analyst Emmanuel Rosner that R1 and commercial van volumes would be roughly in line with 2025 on a full-year basis.
While reiterating that first R2 deliveries would begin in the first half, McDonough acknowledged that “like any ramp, the number of deliveries will be rather small, as you think about the Q2 impact of R2 contribution to 9,000 to 11,000 units per quarter that we anticipate in the first half of the year.”
The company expects the second half to see “the continuation of the ramp of R2, coupled with the ongoing deliveries of our commercial van as well as R1.”
Based on those estimates, Rivian is expecting to deliver approximately 19,700 to 24,700 R2 vehicles this year — potentially making it the company’s best-selling model in its first year of production, outperforming the R1S SUV.
Last year, according to Cox Automotive data, Rivian sold 24,852 R1S units, 7,416 R1T pickups, and 9,830 electric delivery vans.
CEO RJ Scaringe said last year that the bill of materials for R2 was “roughly” half of the R1 models, calling it a “dramatic reduction in the cost structure to build it.”
Q4 Results
The downgrade followed Rivian’s fourth-quarter results, where adjusted EBITDA loss of $465 million beat expectations but revenue of $1.29 billion fell short of DA Davidson’s own estimate.
The company guided for 62,000 to 67,000 vehicle deliveries this year and adjusted EBITDA losses between $2.1 billion and $1.8 billion.
Cantor Fitzgerald Stays Neutral
Cantor Fitzgerald took a more measured view, reiterating its Neutral rating on Monday while raising its price target to $18 from $15.
Analyst Andres Sheppard said Rivian is “heading in the right direction” but that he is awaiting a better entry point following the stock’s sharp rally.
“We view Rivian’s R2 as a material catalyst, and one that should result in higher customer demand, driven by the more competitive price point,” Sheppard wrote.
Unlike DA Davidson, Cantor sees Rivian‘s autonomous driving strategy as a way to boost demand, improve unit economics, offset the potential removal of EV tax credits, and capture market share from competitors in North America.
