What happened

Rivian Automotive (RIVN -5.85%) went public with a famously successful initial public offering (IPO) on Nov. 10, 2021, at a price of $78 per share. The company banked nearly $12 billion from the IPO, and the stock price took off from there, reaching well over $100 per share.

But Rivian shares have been tanking recently, including dropping as much as another 6% today, reaching an all-time low price of $18.55. That's a drop of more than 76% from its IPO price

Shares bounced off those lows but remained down by 3.8% as of 11:10 a.m. ET. For the week, the stock was down nearly 14% as of that time. There are some good reasons for that. 

Yellow Rivian R1T driving away in the woods.

Image source: Rivian Automotive.

So what

Rivian had some encouraging things to say in its third-quarter report, but data from used car retailer CarMax yesterday has investors rethinking the near-term future for Rivian and other early-stage electric vehicle companies.

Rivian's reservations continued to climb in the third quarter, giving the company a backlog of more than 114,000 R1 platform pickup trucks and SUV offerings. It also expects to hit its relatively conservative goal to produce 25,000 vehicles in 2022, and held $14 billion in cash and equivalents as of Sept. 30.

The report also showed the average price received per vehicle delivered was more than $81,400 in the third quarter. That piece of data is what has investors concerned enough to drive the stock to new lows. 

Now what

CarMax pointed to several items to explain a more than 20% year-over-year drop in volume. The company said in a statement, "We believe vehicle affordability challenges continued to impact our third quarter." It specifically noted low consumer confidence, along with rising interest rates and high inflation. 

That could mean tough times ahead for Rivian and other early-stage EV manufacturers. The company is bleeding cash as it continues to ramp up production. If consumers don't have the confidence -- or funds -- to afford Rivian's high-end vehicles, its reservation backlog could start dropping soon. Investors see that possibility and seem to think the company has been valued too high in the current environment.