A Little Unhealthy Information for Rivian and Lucid

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Survey outcomes recommend cooling sentiment towards EVs.
Shoppers nonetheless hesitate in relation to value and public charging infrastructure.
The Trump administration is at the moment making an attempt to tug again assist for EVs.
10 shares we like higher than Rivian Automotive ›

Rivian (NASDAQ: RIVN) and Lucid Motors (NASDAQ: LCID) entered 2025 in several gears. Rivian was coming into a yr with no main automobile launch, stagnating deliveries, and an absence of any seen catalysts, whereas Lucid has strung collectively six consecutive quarters of report deliveries and is ramping the manufacturing of its new Gravity SUV. One factor they each have in frequent is a rising, albeit extra slowly than hoped, electrical automobile (EV) market. This is the unhealthy information: Some current information says that the EV market sentiment seems to be souring.

Tesla modified the sport when it made EVs “cool” for the primary time. Since then, the hype surrounding EVs as the way forward for transportation has swept the globe, in some international locations (like China) sooner than in others. However based on a current survey, that hype could possibly be in decline within the U.S.

Curiosity in EVs spiraled to its lowest stage since 2019, based on a shopper survey commissioned by AAA. Solely 16% of respondents reported being “seemingly” or “very seemingly” to buy an EV as their subsequent automobile, signaling shopper warning. The share of respondents who indicated they’d be “unlikely” or “not possible” to buy an EV as their subsequent automobile jumped from 51% to 63%, the best mark since 2022. The share who imagine that almost all vehicles will probably be electrical inside the subsequent decade fell from 40% in 2022 to 23% this yr.

Not solely is curiosity in EVs down, there’s additionally the lingering pessimism surrounding battery restore prices, whole prices, and charging infrastructure — a narrative as previous as EVs themselves. Extra particularly, 62% of respondents famous excessive battery restore prices as a major cause for avoiding going electrical, whereas buy value was cited by 59% of respondents.

The hesitation in relation to buy value is comprehensible. The typical transaction value for a brand new EV in March was $59,205, far larger than the general common transaction value of $47,462, based on information from Cox Automotive. So far as shopper considerations go, 56% of respondents had the worry of operating out of cost whereas driving, and 55% famous an absence of handy public charging stations.

The waning shopper sentiment goes hand in hand with the Trump administration’s effort to tug assist from the EV trade. Home Republicans handed a funds invoice on Could 22 that may cut back federal incentives for battery manufacturing, in addition to different clear power initiatives. If the Senate approves it, it could reduce the part of the invoice that gives the $7,500 EV tax credit score.

The administration took it a step additional, because the invoice additionally institutes a brand new tax of $250 for EV house owners and $100 for hybrid house owners. The tax contributes to the Freeway Belief Fund to assist infrastructure.

Tesla Model 3 driving on a road. — Tesla Mannequin 3. Picture supply: Tesla.

Buyers can be sensible to mood progress expectations for the EV trade this yr, particularly with tariff uncertainty hanging over the automotive trade. That is very true contemplating that first-quarter information may give a distinct impression. EV registrations grew 16%, based on S&P International Mobility, and market share rose from 6.9% to 7.7%, yr over yr. There was a requirement pull-ahead impact attributable to folks predicting that the tax credit score would quickly disappear.

Rivian, which is at the moment ready anxiously for the R2 launch, lacks momentum in 2025 and will use broader trade energy to spice up its inventory value. Buyers who imagine in Rivian long-term ought to maintain their eyes open for a shopping for alternative this yr.

For Lucid buyers, whereas this decline in shopper sentiment is not splendid, the corporate has loads of self-driven momentum because of quarters of report deliveries. The corporate is at the moment ramping up manufacturing and deliveries of the brand new Gravity SUV EV, which is able to proceed driving whole deliveries larger all year long.

For these two younger automakers, the broader trade’s well being is necessary. The straightforward reality is that folks aren’t taking to EVs within the U.S. as rapidly as buyers had hoped.

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Daniel Miller has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Tesla. The Motley Idiot has a disclosure coverage.

A Little Unhealthy Information for Rivian and Lucid was initially revealed by The Motley Idiot