Rivian Automotive (NASDAQ:RIVN) shares dropped more than 7% intra-day today after BofA Securities analysts downgraded the company from Neutral to Underperform, lowering the price target from $13 to $10, citing a weaker-than-expected 2025 outlook and increasing uncertainty surrounding its partnership with Volkswagen.
While the analysts acknowledged Rivian as one of the more viable EV startups, concerns over profitability, intensifying competition, and potential policy shifts impacting EV incentives contributed to the downgrade.
BofA highlighted that Rivian is making progress toward sustainable gross margins, but slower EV demand and a complex earnings trajectory due to the VW partnership pose challenges for the company in the coming years. Additionally, new SUV and CUV models set to hit the market in 2026 and 2027 could increase competitive pressure, making it harder for Rivian to maintain market share.
Another potential headwind is the uncertainty surrounding federal EV incentives. The analysts raised concerns that the Trump administration could roll back support for electric vehicles, putting Rivian’s $6.6 billion Department of Energy loan—secured under the Biden administration—at risk.
With demand softening and regulatory uncertainty on the horizon, BofA expects Rivian to face near-term challenges, leading to the downgrade and a more cautious outlook on the stock.