Rivian and Lucid Shares Drop Following Trump’s New EV Policy

Investors React to Policy Changes: Stock Analysis and Future Implications

Shares of Rivian Automotive Inc. RIVN and Lucid Group Inc. LCID have plunged sharply after President Donald Trump introduced significant changes to electric vehicle policies. Current technical assessments of these companies indicate a challenging outlook for their stocks in the near future.

Recent Developments: As reported by Benzinga Pro, Rivian’s stock dropped by 10.93%, while Lucid slid by 12.70% over the past two trading sessions. This decline came after Trump signed executive orders affecting EV policies on his first day in office.

These declines are fueled by speculation regarding Trump’s plans to reverse the tax credit valued at $7,500.

Technical indicators from Benzinga Pro reveal that Rivian’s stock faces immediate pressure but has some support in the longer term. In contrast, Lucid is experiencing a consolidation phase.

Rivian Automotive Overview

As of Wednesday, RIVN shares closed at $12.69, falling below key moving averages, including the eight-day average of $13.66 and the 20-day average of $14. Meanwhile, it remains above the 200-day average of $12.28, suggesting some long-term support.

The current relative strength index (RSI) sits at 43.52, indicating a neutral market position.

Lucid Group Overview

For Lucid, shares closed at $2.67 on Wednesday, which is below both its eight-day moving average of $2.96 and its 20-day average of $3.08. The 200-day moving average stands at $2.93, also indicating a bearish trend.

Yet, the stock trades above its 50-day moving average of $2.59, suggesting possible consolidation ahead. The relative strength index for Lucid stands at 41.69, indicating a neutral stance as well.

Implications of Policy Changes: Trump’s actions, which include canceling targets set by Joe Biden in 2021 for 50% of EV sales in the U.S. by 2030, could reshape the EV market landscape.

Additionally, Trump halted unspent funds from a $5 billion EV charging infrastructure initiative and is reviewing emissions rules that require automakers to sell a significant percentage of electric vehicles by 2032. He also plans to challenge California’s zero-emission vehicle mandate, endorsed by 11 other states.

Tesla Inc. TSLA CEO Elon Musk expressed support for such changes, stating in a July 16, 2024 post, “Take away the subsidies. It will only help Tesla.”

During Tesla’s recent earnings call, when the company reported its lowest profit margin in over five years, Musk added, “It would be devastating for our competitors and hurt Tesla slightly, but long-term, it would probably actually help Tesla.”

For Rivian, which focuses on electric trucks and SUVs, the possible elimination of tax credits and reduced funding for EV infrastructure could significantly impact demand. Similarly, Lucid might face hurdles with diminishing government incentives, which are crucial for their market expansion.

In premarket trading Thursday, RIVN experienced a slight drop of 0.39%, while LCID fell by 1.50%.

Further Reading:

Photo courtesy: Rivian