RIVN Plunges 8.9%: UBS Downgrade Sparks Turbulence in EV Sector

Summary
• Rivian Automotive (RIVN) slumps to $17.17, down 8.91% from its intraday high of $18.25
• UBS downgrades RIVN to Sell, citing 'elevated expectations' and demand concerns
• Options activity surges, with 310+ contracts traded on 1/23 expiration
• RIVN’s 52-week range of $10.36–$22.69 now shows 38.5% downside potential from its peak

Rivian’s stock is in freefall after UBS downgraded it to Sell, triggering a sharp selloff amid broader EV sector jitters. The stock’s 8.9% intraday drop has drawn attention to its technical breakdown and options volatility, with traders scrambling to position for a potential continuation of the bearish trend.

UBS Downgrade Exacerbates EV Sector Jitters
Rivian’s 8.9% intraday collapse was directly triggered by UBS’s downgrade to Sell, which cited 'elevated expectations' and 'slowing delivery growth' as key risks. The firm’s price target cut from $13 to $15 reflects growing skepticism about Rivian’s ability to scale profitably amid rising production costs and Tesla’s (TSLA) relentless innovation. Analysts highlighted margin pressures and competition from Tesla’s R2 platform as catalysts for the selloff. The downgrade amplified existing concerns after Rivian’s recent rally outpaced its fundamentals, with EBITDA losses of $3.1B in the last 12 months and a P/S ratio of 3.69.

EV Sector Mixed as Tesla Leads Rally
While Rivian’s shares plunged, the broader EV sector showed mixed performance. Tesla (TSLA), the sector’s bellwether, fell 2.6% but outperformed RIVN, maintaining its 12.7% YTD gain. Lucid (LCID) and NIO (NIO) also declined, reflecting sector-wide margin pressures. Rivian’s struggles highlight its unique challenges: higher production costs, limited retail adoption, and reliance on Amazon’s commercial van orders. In contrast, Tesla’s vertical integration and AI-driven cost reductions provide a clearer path to profitability, widening the gap between sector leaders and laggards.

Bearish Options Play Amid Oversold Technicals
• RSI: 18.20 (oversold)
• MACD: 0.459 (bearish divergence)
• 200-day MA: $14.48 (below current price)
• Bollinger Bands: $17.44 (lower band) vs. $17.17 (current price)
• Support/Resistance: 13.59–13.83 (200D support) vs. 17.51–17.63 (30D support)

Rivian’s technicals suggest a continuation of the bearish trend, with RSI at oversold levels and price near the lower Bollinger Band. The 200-day MA at $14.48 acts as a critical near-term target. Options traders are capitalizing on high implied volatility (IV) and leverage ratios in deep-out-of-the-money puts. Two top options for bearish exposure:

• RIVN20260123P16: Put option with $16 strike, 1/23 expiration, IV 61.1%, leverage ratio 74.76%, delta -0.219, theta -0.008976, gamma 0.170008, turnover 11,827
- High leverage and moderate delta position it to capitalize on a 5% downside move (projected price $16.31), yielding a potential $0.31 gain per contract
- IV at 61.1% suggests strong bearish sentiment, while gamma of 0.17 ensures sensitivity to price swings

• RIVN20260123P16.5: Put option with $16.5 strike, 1/23 expiration, IV 59.04%, leverage ratio 47.76%, delta -0.315, theta -0.005712, gamma 0.2113, turnover 92,979
- High liquidity (92,979 turnover) and gamma of 0.2113 make it ideal for short-term volatility plays

Aggressive bears should prioritize RIVN20260123P16.5 for its liquidity and gamma exposure. If $16.5 breaks, consider rolling into lower strikes for amplified leverage.

Backtest Rivian Automotive Stock Performance
The backtest of Rivian Automotive (RIVN) after a -9% intraday plunge from 2022 to the present shows mixed short-term performance but a slight positive return over the longest 30-day period. The 3-day win rate is 45.86%, the 10-day win rate is 44.12%, and the 30-day win rate is 44.32%. However, the average returns over these periods are negative, with a -0.14% return over 3 days, a -0.81% return over 10 days, and a -0.48% return over 30 days. The maximum return during the backtest was 0.09%, which occurred on the 30th day, suggesting that while there is some potential for recovery, the overall performance has been lackluster.

RIVN at Critical Juncture: Watch 200D MA and Tesla’s Lead
Rivian’s 8.9% selloff has exposed its structural challenges, with UBS’s downgrade amplifying bearish momentum. The stock’s technical breakdown—RSI at 18.20 and price near the lower Bollinger Band—suggests further downside toward the 200-day MA at $14.48. Traders should monitor the 13.59–13.83 support zone and Tesla’s performance (TSLA -2.6%) as sector barometers. A sustained break below $16.5 would validate the bear case, with options like RIVN20260123P16.5 offering high-leverage plays. For now, the path of least resistance is down—position accordingly.