Rivian stock price risk pattern points to a crash soon

Rivian stock price has held steady in the past few days, even as the company warned of a $100 million hit to its revenues after the relaxation of fuel economy rules by the Trump administration. RIVN was trading at $12.4 on Monday, higher than this month’s low of $11.5. It has formed the risky death cross pattern pointng to more downside.

Rivian and other EVs are facing headwinds

The RIVN stock price has plunged by over 25% from its highest point this year, underperforming the stock market as the Nasdaq 100 and S&P 500 surged to record highs.

Its business has come under pressure in the past few months mostly because of Donald Trump’s policies, such as tariffs. While its vehicles are made in the United States, it also has to pay significant tariffs on imported products, such as steel and aluminum. 

Most importantly, the company warned that its business will face up to $100 million a year hit from its energy credits division. The company has historically made millions of dollars selling credits tied to the fuel economy rules. 

The Trump administration has removed penalties for violating these standards as part of his strategy to overturn Biden-era policies known as the Corporate Average Fuel Economy (CAFE) standards.

Additionally, the company will face slow sales growth because of the end of the popular $7,500 EV credit. 

Rivian earnings growth and guidance

The most recent results showed that Rivian’s business made some improvements as customers rushed to buy vehicles before the end of the EV credits. 

Rivian’s revenue jumped to $1.3 billion in Q2 from $1.15 billion in the same period last year. Its six-month revenue rose to $2.5 billion during the quarter. 

Most importantly, it narrowed its losses, helped by its recent cost-cutting activities. The net loss moved to $1.11 billion in the second quarter, down from $1.45 billion in Q2’24. 

Rivian expects that its business will continue doing well this year despite the lingering challenges. It sees its deliveries for the year being between 40,000 and 46,000. 

Its capital expenditure is expected to jump to between $1.8 billion and $1.9 billion, while its adjusted EBITDA will be higher than the previous estimates. 

Yahoo Finance data is expected to show that its revenue for the year will be $5.29 billion, a 6.5% annual increase. It will then jump to $7 billion next year. 

Rivian will lose $3.16 per share this year, an improvement from $4.69 in the same quarter last year. Fortunately, it has boosted its balance sheet, including by raising $1 billion from Volkswagen Group. 

Rivian stock price technical analysis

The daily chart shows that the RIVN stock price has pulled back a bit, rising to a high of $12.4 from last month’s low of $11.57. It has crashed from a high of $17 in May this year. 

A closer look shows that it has formed a death cross pattern as the 50-day and 200-day moving averages have crossed each other. A death cross often leads to more downside. 

The stock has also formed a bearish flag chart pattern, which often leads to more downside. If this happens, the stock may crash to a low of $11.57 followed by the psychological point at $10. A move above the 50-day moving average at $12.98 will invalidate the bearish view.  

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