Barclays has downgraded Rivian Automotive (RIVN) from Overweight to Equal-Weight, and lowered its stock price target from $25 per share to $16. Analysts made this decision based on three factors: the company’s great product but limited technology, demand softness, and the ongoing need for capital raises.
Demand pressure is increasing amid a broader EV slowdown, and analysts believe that signs of demand weakness in EDV and R1T emerged last year. However, recent data points from the sales of R1S inventory units and the accelerated launch of a Standard range version suggest that demand has softened. This is particularly concerning as it reinforces the possibility that RIVN will miss its 2024 target of reaching gross margin profitability.
Furthermore, with ongoing capital needs given preparation for the high volume R2 in 2026, Barclays sees future pressure. The consequences of weak demand are significant, including a challenging volume outlook and potential pricing risk. Overall, these factors reinforce the belief that RIVN is likely to miss its 2024 target of reaching gross margin profitability.