EV maker Rivian released its second quarter financial results on Tuesday, reporting a return to a negative gross margin and an accumulated deficit of nearly $25 billion, a record in the industry.
On Wednesday morning, several Wall Street analysts trimmed their price target as the Irvine-headquartered manufacturer saw its stock price reach a new low since mid-April at $11.42
JP Morgan reduced its target to $9.00 (from $10.00), Wedbush analyst Dan Ives followed and trimmed the bullish price target by $2 to $16.00 citing “continued tariff challenges over the coming quarters.”
Also, Needham and Mizuho reduced their price targets on Rivian to $14 and $12, respectively. The previous targets were $16 for Needham and $13 for Mizuho analyst Vijay Rakesh, who maintained the ‘Neutral’ rating.
After having increased its capital expenditures (capex) guidance to $1.8—$1.9 billion in May, the company now raised its full-year adjusted EBITDA loss forecast to $2.0—$2.25 billion, citing “recent changes associated with regulatory credits and our second quarter performance.”
The new guidance represents an increase of approximately 18% at the midpoint.
“While we believe our long term opportunity to drive meaningful growth and profitability remains strong, some of the recent policy actions will have an impact on our results and cash flow of our business,” Chief Financial Officer Claire McDonough said during the earnings call that followed the report.
Last quarter, McDonough said the capex forecast had changed due to new tariff-related costs on battery components and raw materials, which are expected to add “a couple thousand dollars” to the cost of each vehicle.
The CFO reaffirmed the value on Tuesday’s earnings call, saying “there’s no change overall in terms of the outlook from a tariff impact on the business” in 2025.
Rivian sources most of its materials from the US or USMCA-qualified suppliers, which are exempt from the 25% tariff on imported vehicles and auto parts.
However, according to McDonough, an “incremental” financial impact “is real from a policy standpoint,” driven by changes in the regulatory credit outlook.
“We no longer anticipate we’ll be selling or earning revenue from the sale of regulatory credits in the second half of this year,” the executive noted.
In the first quarter, Rivian posted a gross profit of $206 million, which was largely due to the sale of regulatory credits. By posting a positive margin, the company unlocked a $1 billion investment from Volkswagen Group as part of their joint venture announced last year.
The EV maker sold the majority of regulatory credits allocated for the year between January and March.
When asked during the first quarter’s earnings call whether the full-year guidance of $300 million in regulatory credit revenue would be raised, CFO Claire McDonough said it would not.
At the same time, electric vehicle makers in the United States are dealing with the termination of the EV tax credit, which is a part of Donald Trump’s tax cut and spending bill.
Last month, the US Senate released a revised version of the “big, beautiful bill,” proposing the elimination of the $7,500 consumer credit by September 30 — as opposed to the end of the year, as initially predicted.
Most R1 model purchases do not qualify for the tax credit as the final vehicle price typically exceeds the $80,000 limit.
The standard versions of both the R1S SUV and the R1T pickup truck remain priced below this threshold, despite slight price increases in its 2026 versions.
Rivian‘s R2 — which is set to be priced around $45,000 — could have qualified for the discount, but since its launch is scheduled for the first half of 2026, well after the credit ends, it won’t benefit from it.
The company reiterated its revised annual guidance of 40,000—46,000 vehicles, meaning that it estimates to deliver less vehicles in 2025 than it did in both 2023 and 2024.
Founder and CEO RJ Scaringe said on Tuesday that the company expects the third quarter to be its “strongest quarter of the year.”
In a shareholder letter, the EV maker said it is anticipating the July—September period to be the “peak delivery quarter of the year across both our consumer and commercial vehicles.”
When asked by Guggenheim Securities analyst Ron Jewsikow whether recent policy changes affecting consumer credits might influence Rivian‘s outlook on R2 pricing, costs, or production capacity, CEO RJ Scaringe responded that the company is still committed to launching the R2 at its Normal, Illinois plant, with an allocated capacity of 155,000 units.
Rivian also plans to expand R2 production to its upcoming Georgia facility, which is under construction and expected to support an annual capacity of 400,000 units.
Additionally, the company is “watching very closely” how trade relations between the US and EU develop, as the R2 platform is intended to serve both markets.
