What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) jumped 3.6% in the morning session after the company announced it was cutting less than 1.5% of its workforce as part of a strategic plan to streamline operations ahead of its R2 SUV launch. The job cuts are part of the company's efforts to enhance efficiency and lower costs as it prepares for the highly anticipated launch of its more affordable R2 model in 2026.
According to a company spokesperson, the changes are part of an “ongoing effort to improve operational efficiency for R2.” The positive investor reaction suggests the market views this cost-cutting measure as a prudent step toward improving the company's financial health and ensuring a successful launch of its next-generation vehicle, which is crucial for its long-term growth.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 33 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 about 22 hours ago when the stock dropped 6.5% after a broader slowdown in the electric vehicle market and significant U.S. regulatory headwinds.
The negative sentiment was fueled by news that EV giant BYD cut its 2025 sales target, signaling the company's slowest annual growth in five years. This aligns with a broader trend, as U.S. EV sales declined in the second quarter and grew by only a modest 1.5% in the first half of 2025. Adding to the pressure, U.S. EV companies are facing challenges from recent policy changes. The removal of the $7,500 EV tax credit is expected to slow revenue growth.
Furthermore, the end of the Corporate Average Fuel Economy (CAFE) program has frozen the market for regulatory credits. Rivian has estimated this will cost it over $100 million in high-margin revenue. Tariffs on raw materials like steel and aluminum are also increasing production costs for the automaker.
Rivian is up 8.8% since the beginning of the year, but at $14.40 per share, it is still trading 14.9% below its 52-week high of $16.92 from May 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 $143.06.
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