Rivian Automotive, once recognized as a formidable challenger to Tesla, faces mounting challenges in the highly competitive U.S. auto industry. Recently, rumors circulated about a potential acquisition by Tesla, though Elon Musk, Tesla's CEO, denied these claims during an event in Pennsylvania. Musk expressed hope for Rivian's success, despite the industry's difficulties, and emphasized Tesla's focus on its own business growth.
Musk pointed out that the American auto industry is particularly tough, with only Ford and Tesla avoiding bankruptcy. He wished Rivian well, acknowledging the firm's difficult position amidst fierce competition. According to Musk, Tesla's success hinged on technical breakthroughs in electrification and autonomous driving.
Rivian, a burgeoning U.S. electric vehicle manufacturer, previously secured a $5 billion investment intention from Germany's Volkswagen. However, the company has struggled amid intense market competition, facing financial challenges and a declining stock price this year.
Analysts attribute Rivian's difficulties to the high cost of most of its models, which are unaffordable for average consumers. The company plans to launch a smaller model, the R2, by the end of 2026 or 2027 to compete with Tesla's Model Y.
Earlier this month, Rivian reported lower-than-expected third-quarter deliveries and cut its annual production forecast due to "component shortages." The company delivered 10,018 vehicles and produced 13,157 vehicles in the third quarter, falling short of FactSet's estimate of 12,670.
Last month, Morgan Stanley analysts downgraded the ratings of several companies, including Rivian, against the backdrop of a slowing auto market. Rivian's stock has dropped 57% this year, nearing historic lows, with a short interest rate of about 16.5%, equivalent to approximately 122.3 million shares.
