Rivian stock price analysis: is the recovery at risk?

Rivian stock price has rebounded in the past few weeks, moving from the August low of $11.53 to $16 today. It is hovering at its highest level since May 27, with its market capitalization being over $18 billion.

Rivian has made progress this year

Rivian, the Amazon and Volkswagen-backed electric vehicle company, has made some progress in the past few months.

One of the most notable events happened mid this month when it held its groundbreaking ceremony for its Georgia plant whose construction will start in 2026. It hopes that it will create 7,500 jobs by 2030, with customer vehicle deliveries starting in 2028.

The company hopes that, once complete, the plant will help it to manufacture about 400,000 vehicles annually, a move that will make it one of the top American auto companies.

Rivian has also worked to improve its balance sheet, especially through its partnership with Volkswagen, the German company that pledged to invest $5 billion in the company.

Rivian ended the last quarter with about $7.5 billion in cash and equivalents. These funds included the $1 billion it received from Volkswagen and the company expects to receive $2.5 billion when it hits several important milestones.

Also, the company will receive funds from the Department of Energy because of the Georgia plant. Specifically, it hopes to receive about $6.5 billion from the department.

Short interest rises as challenges remain 

Still, the company faces major headwinds, which explains why its short interest has soared to over 12% in the past few weeks.

The most recent results showed that Rivian delivered 10,661 vehicles in the second quarter, down from 13,790 in the same period last year.

Its automotive revenue dropped from $1.07 billion to $927 million in the same period. Its revenue services came from the software and services business whose revenue rose from $84 million to $376 million.

The challenge, however, is that its two main businesses will face major headwinds in the coming months. For example, the EV business will be affected by Trump’s administration decision to end the popular EV tax credit, which is worth about $7,500 today.

These changes mean that its third-quarter revenue will surge as customers rushed to buy vehicles before the deadline. Analysts expect that the revenue will rise by 70% to $1.49 billion this quarter.

However, these gains will be short-lived as analysts expect its revenue to crash by 27% in Q4. Also, the company may struggle to hit its target of delivering between 40,000 and 46,000 vehicles this year.

The other main challenge is that the Trump administration also ended clean energy credits, a move that Rivian expects will affect its revenue by about $100 million in high-margin revenue a year.

Trump argues that ending these funds will make vehicles cheaper again. On the positive side, the Zero Emission Transportation Association has sued to push the NHTSA to start issuing compliance letters. 

The other major challenge is that Rivian is still burning substantial sums of money as its losses remain.

Rivian stock price technical analysis

The daily timeframe chart shows that the Rivian share price has rebounded from a low of $9.5 in November last year to $16 today.

Rivian shares have remained above the 50-day and 100-day Exponential Moving Averages (EMA). The MACD indicator has moved above the zero line, while the Relative Strength Index (RSI) is nearing the overbought level at 70.

Therefore, the stock will likely rise a bit and hit the important resistance level at $16.65, its highest level on May 20th. It will then resume the downward trend as risks remain.

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