Rivian's $100M in CAFE credit sales stalled by policy reversal.

Rivian claims $100M in CAFE credit sales stalled by policy reversal. The US government has tied up $100M in revenue from the sale of regulatory credits to legacy automakers due to the reversal of prior administration's fuel economy policies.

Rivian Automotive (NASDAQ:RIVN) has reported that $100 million in regulatory credit sales have been stalled due to a policy reversal by the U.S. government. The reversal of fuel economy policies by the previous administration has led to a halt in the issuance of compliance letters by the National Highway Traffic Safety Administration (NHTSA), delaying the finalization of regulatory credit transactions [1].

The regulatory credits, which are sold by electric vehicle (EV) manufacturers to traditional automakers struggling to meet emissions standards, have been a significant revenue source for companies like Rivian and Lucid (NASDAQ:LCID). According to Rivian, these credits accounted for 6.5% of its total revenue in the first half of 2025 [2]. The company has already negotiated deals worth $100 million but is unable to finalize them due to the policy reversal.

The policy reversal stems from the Trump administration's July 2022 executive order, which removed penalties for failing to meet fuel economy standards. This decision led NHTSA to delay compliance notifications, effectively halting the sale of regulatory credits [2]. The Zero Emission Transportation Association (ZETA) has filed a petition in the U.S. Court of Appeals in Washington, D.C., seeking to force NHTSA to resume issuing compliance letters [1].

The halt in regulatory credit sales has significant financial implications for Rivian. The company estimates that it will not receive any more credit sales this year, which is a meaningful portion of its revenue. Tesla (NASDAQ:TSLA), the largest U.S. EV maker, has also been impacted, with a recent regulatory change resulting in a $1.1 billion revenue shortfall from selling credits [2].

Legacy automakers, such as General Motors (GM) and Ford (NYSE:F), have benefited from the policy reversal. General Motors has spent at least $3.5 billion on credits since 2022, while Ford has committed around $4.3 billion [2].

Rivian's financial strain is compounded by other challenges, including rising production costs, supply chain bottlenecks, and increased competition from Tesla and Chinese EV makers. The company's R2, a $45,000 midsized SUV, is being developed to address these issues and reduce per-unit costs by 50% [3].

References:
[1] https://seekingalpha.com/news/4486151-rivian-claims-100m-in-cafe-credit-sales-stalled-by-policy-reversal---report
[2] https://www.investing.com/news/stock-market-news/rivian-warns-of-100-million-revenue-hit-after-trump-eases-fuel-economy-rules-4194633
[3] https://www.ainvest.com/news/rivian-revenue-headwinds-policy-shifts-market-realities-reshaping-ev-valuations-2508/