BNP Paribas highlights that electric vehicle manufacturers Rivian Automotive (RIVN, Financial) and Lucid Group (LCID) stand to benefit from President Donald Trump's tax reform spending bill. The bill, which has passed the U.S. Senate and is under consideration in the House, will terminate the $7,500 electric vehicle consumer tax credit after September 30. Rivian and Lucid's stock prices rose by 4.3% and 8.3% respectively during trading, closing up 1.5% and 5.4%.
Analyst James Picariello notes that Rivian and Lucid may gain from reduced competition as other automakers like General Motors, Ford, Hyundai, and Kia slow their electric vehicle expansion due to decreasing government subsidies and weakening consumer demand. This shift could increase market share for pure electric brands such as Rivian, Lucid, and Tesla.
The tax reform offers potential benefits for the electric vehicle sector, which has struggled with macro pressures like tariff uncertainties. Rivian might also gain from negative sentiments toward Elon Musk and Tesla, stemming from Musk's previous cooperation with the Trump administration. Tesla reported a 13% year-over-year decrease in Q2 deliveries, totaling 384,122 vehicles.
Rivian and Lucid both reported lower-than-expected Q2 deliveries, with Rivian at 10,661 units and Lucid at 3,309 units. BNP Paribas predicts a Q3 delivery increase as consumers rush to buy before the tax credit expires. Given Lucid's slow production ramp-up and delayed model launches, Rivian is likely to benefit more. Picariello rates Rivian as "outperform" and Lucid as "underperform."
