By Rivian Automotive Inc (NASDAQ: RIVN) is up 13% today after California said it will revive incentives for EV buyers if Donald Trump moves to terminate the federal electric vehicle tax credits.
Gov. Gavin Newsom plans on announcing a new version of the state’s CVRP (clean vehicle rebate programme) if President-elect eliminates rebates on buying select new electric vehicles.
An end to federal tax credits could result in a 27% decline in US demand for EVs, as per a recent research.
That’s part of the reason why Rivian stock has been in a sharp downturn since mid-July.
What California news mean for Rivian stock
California is currently the largest market for EVs within the United States.
The state has sold more than 2 million electric vehicles to date.
The Clean Vehicle Rebate Programme was first announced in 2010 and offered incentives to EV buyers through late last year when it ultimately had to be discontinued due to funds exhaustion.
But Gov. Gavin Newsom now plans on reviving the programme if Donald Trump announces an end to federal EV tax credits as the 47th President of the United States.
Trump is scheduled to be sworn into office on January 20th, 2025.
Ahead of it, Rivian stock is down more than 50% versus its 52-week high.
Tesla reaches a settlement with RIVN
Rivian shares are pushing to the upside on Monday also because it reached a “conditional” settlement with Tesla Inc in a lawsuit that accused it of stealing EV trade secrets.
The 2020 lawsuit accused the electric vehicles manufacturer of employee poaching as well.
Tesla will dismiss the case by December 24th.
But any further details of its agreement with RIVN are yet to be revealed.
The news arrives only days after Rivian Automotive reported a wider-than-expected loss for its third financial quarter as revenue fell over $100 million short of Street estimates.
Rivian stock does not currently pay a dividend to attract income investors.
Rivian share price could double from here
Rivian Automotive has been a pain for its shareholders this year but a Canaccord analyst expects next year to be a different story altogether.
Despite weak results, George Gianarikas has a $23 price target on RIVN that translates to about a 100% upside from here.
Why? Because the company’s management reiterated its production guidance this month and said it continues to “expect positive gross margin in the fourth quarter” of 2024.
Canaccord Genuity recommends owning Rivian stock also because Volkswagen recently raised its planned investment in the EV maker to $5.8 billion.
Our market expert Crispus Nyaga also sees possibility of a 125% rally in Rivian shares as they have recently formed a bullish double-bottom pattern.
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