Electric vehicle maker Rivian is warning that it may lose up to $100 million in revenue due to the Trump administration’s decision to relax fuel economy standards and remove penalties for non-compliance. The change, which was signed into law by President Trump in July, has sent shockwaves through the industry, with other EV makers such as Lucid Group and Tesla also impacted.
Prior to the change, Rivian and its peers were generating millions of dollars in revenue by selling credits to companies that did not meet fuel economy standards. However, now that penalties have been lifted, these sales are no longer possible.
Rivian’s director of public policy has stated that the company had negotiated deals that cannot be finalized due to a delay in notifications from the National Highway Traffic Safety Administration (NHTSA). The agency has announced plans to issue compliance notifications once it completes fixing the revised fuel economy standards, but a timeline for this is unclear.
Tesla and Lucid Group are also feeling the effects of the change, with Tesla stating that regulatory actions have resulted in a $1.1 billion decrease in expected revenue from selling credits. Industry analysts are predicting 16% upside potential for Rivian’s stock price target of $14, but some are warning that the company’s sales will be impacted by weak demand.
Source: https://www.tipranks.com/news/rivian-rivn-flags-100m-revenue-loss-as-trump-eases-fuel-economy-rules