Shares of Rivian Automotive Inc. fell 12% on Thursday, the worst day for the company in months, as more people worried that the Trump administration is planning to get rid of EV tax credits.
Tesla Inc. shares TSLA -5.82% also went down, but not as much as other stocks because Tesla is thought to be less dependent on the $7,500 tax credits than its rivals. It is also thought to benefit from the new administration in other ways, since CEO Elon Musk is a well-known Trump adviser.
It was the worst day for Rivian shares RIVN -14.32% since February 22, when they dropped 12% after the electric vehicle maker told investors it would make a few fewer cars this year than it did in 2023.
Since Trump won the election on November 5, there have been a lot of worries about the EV points.
A lot of people think that the EV tax credit is going to be cut, maybe by ending earlier. The credit is valid until 2032 thanks to the Inflation Reduction Act, a Democratic law passed in 2022 that created the EV credits and many other tax breaks linked to clean energy.
Reuters said on Thursday that Trump’s transition team was going to get rid of the $7,500 tax credit for electric vehicles as part of a larger plan to change the tax system. The report used the words of two people who knew the truth about the situation.
The story says that Tesla employees have told the Trump transition team that they agree with ending the credits.
Because it makes more EVs than any other company, Tesla is thought to be the least hurt by the end of the tax credits. People think that taking away the tax credits and putting in place prices will make Tesla’s lead in the industry even stronger, thanks to the company’s size and low costs.
People also think that a Trump administration will be less strict on robotaxis rules, which is something that Tesla has made one of its main goals. For his part, Musk became one of Trump’s biggest fans and closest friends, and after the election, Tesla stock went through the roof.
On the other hand, Rivian has had a terrible year this year because of cost overruns and supply problems. It makes what are called “adventure” EVs, which are praised for having a lot of extras but start at around $70,000. A cheaper Rivian EV will come out in a few years.
Rivian’s stock went through the roof earlier this week when the company that makes electric vehicles (EVs) said that a bigger joint venture with Volkswagen Group VOW 1.71% VOW3 1.78% was now up and running. People see the partnership with the German automaker, which is having its own issues this year, as a vote of trust in Rivian’s technology.
