Rivian Falls on Wolfe Downgrade, Georgia Lawsuit Dismissed

On Thursday, Rivian’s (RIVN) stock fell after Wolfe Research demoted its rating from “outperform” to “peer perform, while a US court dismissed the bid to stop the construction of its Georgia plant.

Shares in Rivian slumped -4.04% to $19.50 apiece on January 04, extending the automaker’s losing streak to five sessions. Still, it made a 0.41% after-hour recovery, and analysts expect a 3.68% additional gain to $20.30 in the coming session.

Wolfe Research cited demand and growth concerns as the primary drivers for downgrading Rivian’s shares. It acknowledged the electric vehicle (EV) maker’s production improvement last year but doubted its ability to sustain the momentum in 2024 and 2025.

The independent research firm underscored Rivian’s heavy reliance on its R1 consumer platform. It added that the Amazon-backed carmaker needs to expand its offerings by launching its second-generation models to stabilize investor sentiment.

The EV manufacturer announced plans to suspend operations in the second quarter for capacity augmentation. It plans to increase its R1 capacity by 30.77% from 65,000.00 to 85,000.00 units.

In addition, Rivian said it expects to reap a positive gross profit in the fourth quarter. Market watchers estimate that the firm incurred a gross loss of around -$1.80 billion until last year’s third quarter.

Despite Wolfe Research’s downgrade, industry experts predict the positive sentiment from the Georgia factory ruling will reverse the sharp Thursday drop.

Georgia Plant Saved After Rivian’s Legal Victory

A Morgan County judge has dismissed a lawsuit seeking to halt the construction of Rivian’s $5.00 billion factory in Georgia.

The 16 million-square-foot plant is set to be the state’s second-largest economic development project in terms of expected jobs and investment.

In January 2023, six people sued the state of Georgia for violating local zoning codes and land disturbance permit regulations. They claimed the state government granted Rivian the 1,800-acre project site to circumvent public scrutiny and opposition.

The judge ruled that local zoning laws do not apply to government-owned land to be developed for economic purposes. Responding to the verdict, the plaintiffs said they are considering an appeal.

The Joint Development Authority (JDA) in charge of Morgan and nearby counties welcomed the ruling. They expressed optimism over the positive impact the factory may provide on the region.