Rivian (Nasdaq: Riven) In the past few years, it has become one of the most promising electric vehicle (EV) companies in the United States. The company's brand scored the highest in all auto brands in terms of owner satisfaction; it has reached a significant milestone in gross profitability over the past two quarters. It has exciting new models in the pipeline.
But the Trump administration’s tariffs are throwing wrenches into plans for many automakers, and Rivian is not immune. This is how the company handles current automatic tariffs and whether Rivian shares are now being purchased.
Like all other automakers, Rivian has purchased some parts from abroad, and the tariffs are already increasing the company's capital expenditure (CAPEX) and ease their automobile production.
Rivan's management lowered its annual vehicle delivery guidelines to the 40,000 to 46,000 range, down from the previous 46,000 guidelines to 51,000 vehicles. In its first-quarter shareholder letter, the company said its guidance reflects "evolving" trade regulations and tariffs.
The downward revision means that Rivian will have fewer vehicles in 2025 than in every year of the past two years. Things got worse for Rivian due to the tariffs. The company raised its capital expenditure guidelines for the year to a range of between $1.8 billion and $1.9 billion due to “anticipated impact of tariffs.”
Rivian chief financial officer Claire McDonough said in a revenue call that the company's spending will increase "several thousand dollars" per vehicle due to tariffs.
It is worth noting that Rivian is an American automaker with 100% of vehicles in the United States. CEO RJ Scareinge also recently said Fox Business The interview with his company has a "U.S.-centric supply chain." However, tariff impact is important to companies.
Rivan mentioned the possibility that tariffs had negative impacts on the economy several times in the shareholder letter, saying:
The current global economic landscape presents serious uncertainty, especially in terms of evolving trade regulation, policies, tariffs and the overall impact of these projects on consumer sentiment and demand.
Economic cracks have begun to show. The U.S. economy signed contracts in the first three months of this year (the first quarter of negative growth since 2022). The annual decline of GDP by 0.3% has sparked concerns about a recession that could be coming.
A recent survey of company CFOs found that 60% of people expect a recession by the end of this year, with 95% saying tariffs hindering their ability to make decisions.
For Rivian and his peers, the slowdown could be very unfavorable. In tough economic times, automakers are not selling much, and electric car manufacturers are more vulnerable to injury because their vehicles are more expensive. The average trading price of electric vehicles in March was $59,200, 7% from the same period last year.
If a mature economy slows, Rivian may see cost increases due to tariffs in vehicle sales.
I am a long-time believer of Rivian and I own a stake in the company, but if you are considering buying stocks right now, it is better to wait.
Rivian has some promising, cheaper vehicles coming up over the next few years, including the R2 and R3, which can help the company gain more market share and attract buyers on smaller budgets. But they will be initiated in the event of economic uncertainty and may be introduced in the ongoing tariffs.
My view of Rivian for a long time, but I think the current situation has extended the time frame for Rivian's success. I currently agree with the uncertainty, but investors considering buying Rivian should know that its roadmap for success may be extended.
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Chris Neiger has a position in Rivian Automotive. Motley fool has no position in any stock mentioned. Motley Fool has a disclosure policy.
Are Levian stocks bought in President Trump’s tariffs? Originally published by Motley Fool