Rivian’s price target lowered to $70 from $110 at Wells Fargo ahead of Earnings Report

Wells Fargo analyst Colin Langan lowered Rivian’s price target from$110 to $70 while maintaining an Equal Weight rating on the shares ahead of the March 10 Earnings report. Langan is bullish on the products and brand strategy, although he sees near-term headwinds including risk to Q1 delivery expectations, the negative impact from rising interest rates, increased BEV competition, and potential selling post the lock-up expiration in mid-May.

“We are bullish on the products and brand strategy; however, we see near-term headwinds.” —wrote the analyst. Rivian shares closed 8.36% lower on Tuesday session and are currently down 35% Year-to-date.

(Source: Rivian)
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Rivian announced on Wednesday evening that has raised the price of its R1T pickup by 17% and R1S SUV by about 20%. Increases in the cost of raw materials, inflationary pressure and the already known chip shortage issue are the reasons for this price increase that will affect also the existing reservation holders.

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“The Rivian R1T’s price is increasing 17% which will increase the base cost from $67,500 to approx $78,975. The R1S will see a whopping 20% price increase, bringing the new base price from $70k to about $84k.”

“Like most manufacturers, Rivian is being confronted with inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips).

This rise in cost and complexity due to these challenging circumstances necessitate an increase to the prices of the R1T and R1S models we offer today — prices which were originally set in 2018. This decision will allow us to continue to offer competitive products that maintain the high standard of quality, performance and capabilities that our customers expect and deserve from Rivian.

Along with the adjusted prices for our current offerings, we are also announcing Dual-Motor AWD and Standard battery pack options for R1T and R1S, which will provide a broader range of choices for customers as part of our expanding portfolio of options, upgrades and accessories.” — Rivian said in an emailed statement. Also acessories prices increased with the Rivian Camp Kitchen costing now $6,750, up from 5,000.

Last week, Rivian‘s Chief Executive Officer R.J. Scaringe said that the company is “making progress” in the increase of production for electric vehicles at its Normal, Illinois, assembly plant and is aiming to take 10% share in the EV market by 2030. The global semiconductor chip shortage is seen by Scaringe as the “most painful” constraint in the push to build production.