Rivian, Lucid Shares Sink After Trump Win: What’s Driving Bearish Move? – Rivian Automotive (NASDAQ:RIVN)

Rivian Automotive, Inc. TORN and Lucid Group, Inc. LCID shares fall significantly on Wednesday after the election of Donald Trump as the 47th president of the United States Here’s a look at how Trump’s policies could affect electric car manufacturers.

What to know: Trump has largely condemned electric cars, claiming they are being forced on consumers through unfair regulations, and has vowed to end what he calls the “electric vehicle mandate.”

Trump has specifically said he plans to eliminate many EV incentives included in the Biden administration’s Inflation Reduction Act (IRA), including purchase rebates and tax incentives. He has also said he plans to change or end vehicle emissions standards under the Environmental Protection Agency.

Read next: What does Trump’s victory mean for EV Giant Tesla and the Big 3 automakers?

EV start-ups like Lucid and Rivian are already facing declining consumer demand for electric vehicles, and Wedbush analysts see the Trump presidency as another challenge for automakers.

“We believe a Trump presidency will be an overall negative for the utility industry as the utility rebates/tax incentives are likely to be withdrawn,” the Wedbush analysts wrote.

Rivian announced plans for a new more affordable model, the R2, to launch in 2026. The R2 was set to be priced below the limits to qualify for the full $7,500 federal tax credit. Trump’s planned removal of the tax credit could potentially disrupt those plans.

Trump has also proposed a universal 10% tariff on imports and a 60% tariff on imports from China, which could affect Rivian and Lucid’s supply chains and production costs, potentially leading to higher car prices or reduced profit margins. Neither Rivian nor Lucid has yet turned a profit, and reduced margins would push the path to profitability further out.

While Rivian and Lucid shares are down, Telsa Inc. TSLA the stock rises. Unlike the other two companies, it should have the size and scope to absorb potential policy changes.

RIVN, LCID Price action: According to Benzinga Pro, Rivian shares are down 9.02% to $9.64 and Lucid shares are down 5.94% to $2.12 by the time of publication on Wednesday.

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Photo: Courtesy of Rivian Automotive, Inc.