Rivian stock forecast: 24% upside despite Ford price cuts

Rivian (NASDAQ: RIVN) stock price has lost its momentum as concerns about a slowdown in the electric vehicle industry. The shares have dropped in the past three straight days and are trading at $23.92. Despite the retreat, the stock remains about 102% above the lowest level in June.

Ford slashes Lightning price

Demand for electric vehicles in the United States is slowing down as inflation remains a major challenge. This view was confirmed on Monday when Ford decided to slash the prices of its popular Lightning vehicle.

The company decided to cut the price by between $6,000 and $10,000. In addition to this, the company will provide a discounted interest rate on some vehicle models. This happened as the number of EVs in dealer lots jumped to over 90k.

The price cut by Ford has a direct impact on Rivian, a company that focuses on trucks. It sells its R1T truck, which has a range of up to 400 miles. The company also sells its R1S which has 390 miles.

Therefore, there is a possibility that Rivian will need to cut its R1T price, which starts at $73,000. The cheapest Ford Lightning vehicle will go for about $50,000. As such, there is a likelihood that more people will opt for the cheaper Lightning truck.

The other challenge for Rivian is Tesla’s Cybertruck, which has now gone into production. It starts at about $50,000, which is also cheaper than R1T. 

The next key catalyst for the Rivian stock price will be the ongoing earnings season. Tesla, the biggest EV company in the world, will publish its results on Wednesday. In most periods, EV stocks tend to react to Tesla’s earnings.

Rivian will publish its results on August 8th. Analysts expect that the company’s revenue rose to $974 million in Q2 while its loss per share dropped to $1.53. Rivian had $364 million in the same quarter of 2022. 

Rivian stock price forecast

RIVN chart by TradingView

In June, I published an article that made a bullish case for Rivian shares. I pointed to the quality of its vehicles, its cheap valuation, and its revenue growth. Analysts expect the company’s revenue will jump to over $54 billion in 2030.

The daily chart shows that the Rivian stock price has been in a strong bullish trend in the past few months. It moved above the key resistance of $22.21 on July 6th. This was an important level since it was the highest level in February. 

Further, the 100-day and 50-day moving averages. The two have formed a bullish crossover. Therefore, there is a likelihood that the shares will continue rising, with the next key level to watch will be at $30, ~24% above the current level.