Shares of Rivian (RIVN 6.10%) were heading lower today, seemingly in response to a report in The Wall Street Journal offering more evidence that demand for electric vehicles (EVs) is cooling.
As of 12:38 p.m. ET, the EV stock was down 6.7%. Fellow EV start-up Lucid Motors (LCID 0.41%) was also down 8.5% at the same time, while Tesla (TSLA -1.11%) stock was off 3.9%.
Image source: Rivian.
EV sales are slowing down
Last night, The Wall Street Journal said General Motors (GM 0.48%) is delaying the opening of a large electric pickup truck factory in Michigan. It's the latest sign of flagging enthusiasm in the auto industry for EVs, as consumer demand seems to be slowing now that early adopters have already purchased EVs. GM said it was delaying the opening of a new plant by a year due to its desire "to better manage capital investment while aligning with evolving EV demand."
The news follows a decision by Ford earlier this week to lay off one shift of workers at its Lightning EV plant, a reflection of weakening demand. Meanwhile, there are signs that electric vehicle inventories are building even as prices have come down in the industry.
There was also some company-specific news out on Rivian today. Amazon said it has taken delivery of 10,000 electric delivery vans from Rivian, a significant milestone in Amazon's agreement to buy 100,000 vans from Rivian by 2030.
CEO RJ Scaringe also told Reuters last night that its $1.5 billion capital raise earlier this month didn't reflect any concerns with the business and that the move was designed to create a buffer as the company begins setting up manufacturing facilities for its smaller R2 vehicles.
Is Rivian stock in trouble?
The signs of fading EV demand are certainly concerning for Rivian and the rest of the industry. The company just reported strong third-quarter production and delivery numbers, which encouraged investors. However, the company is still deeply unprofitable, and the stock's valuation is based on the premise that the EV industry will continue to grow and eventually displace traditional combustion vehicles.
We'll learn more about the health of the industry when Tesla reports earnings after hours today. Expect Rivian stock to move on the news tomorrow, especially if the EV leader reveals more signs of weakening demand.
