What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) fell 5.6% in the morning session after Morgan Stanley downgraded the stock to 'Underweight', citing a cautious outlook for the electric vehicle market and risks tied to the company's future product launch.
The investment bank pointed to concerns about the broader EV market and specific risks associated with Rivian's planned R2 launch in 2026. The downgrade also reflected worries about the company's smaller scale and financial challenges when compared to its rivals. This move came despite some other firms, like Stifel and Tigress Financial, maintaining their 'Buy' ratings on the stock. Overall, Wall Street sentiment remained cautious, with a consensus 'Hold' rating from analysts.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3.3% on the news that Morgan Stanley downgraded the company's stock to "Underweight" from "Equal Weight."
The investment bank set a price target of $12.00, citing significant risks associated with the company's planned R2 vehicle launch in 2026. Analysts pointed to a challenging electric vehicle market as a major headwind. Key concerns included a general slowdown in EV adoption by consumers and the loss of the $7,500 federal tax credit for the new model. Furthermore, the bank noted persistent consumer worries about vehicle range, the availability of charging infrastructure, and overall affordability in the current market.
Rivian is up 25.6% since the beginning of the year, and at $16.64 per share, it is trading close to its 52-week high of $18.06 from December 2025. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $165.23.
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