RIVN Plunges 7.9%: What's Fueling the Selloff Amid EV Sector Turbulence?

Summary
• UBS downgrades RIVN to 'Sell' with $15 price target
• Intraday range of $17.11–$18.25 amid 7.9% drop
• Analysts highlight elevated expectations and delivery challenges

Rivian Automotive (RIVN) is under intense pressure, with shares tumbling 7.9% to $17.36 as of 16:42 ET. The selloff follows a downgrade from UBS and broader sector jitters. With the stock trading near its 52-week low of $10.36 and a dynamic PE of -5.63, investors are recalibrating expectations for the EV maker’s 2026 outlook.

Sell-Downgrade Sparks Sharp Selloff in Rivian Shares
The 7.9% intraday plunge in RIVN is directly tied to UBS’s downgrade to 'Sell' from 'Neutral,' citing 'elevated expectations' and softening demand. The firm’s $15 price target (up from $13) reflects skepticism about Rivian’s ability to offset expired EV tax credits and rising tariffs. Compounding this, the company’s Q3 earnings report—while showing a narrower-than-expected loss—highlighted a 31% year-over-year drop in Q4 deliveries to 9,745 units. Analysts at Wolfe Research and Goldman Sachs have echoed caution, with price targets clustered below $17, signaling a bearish consensus.

EV Sector Volatility Intensifies as Tesla Trails RIVN's Slide
The broader EV sector is under pressure, with Tesla (TSLA) down 2.3% and Lucid (LCID) down 0.36%. Rivian’s selloff mirrors sector-wide concerns over waning consumer demand and regulatory headwinds. However, Rivian’s 8.5% drop outpaces Tesla’s decline, reflecting its weaker balance sheet and reliance on fleet sales. The stock’s 52-week range of $10.36–$22.69 contrasts sharply with Tesla’s $200–$350 range, underscoring divergent investor sentiment.

Options Playbook: Capitalizing on RIVN’s Volatility with Leverage
• 200-day MA: $14.48 (below current price) • RSI: 18.2 (oversold) • Bollinger Bands: $17.44–$22.31 • MACD: 0.46 (bearish divergence) • 30D Support: $17.51–$17.63

RIVN’s technicals suggest a short-term oversold condition, but structural risks persist. Key levels to watch: the 200-day MA at $14.48 and the 30D support at $17.51. A breakdown below $16.50 could trigger a test of the 52-week low. For options, two contracts stand out:

• RIVN20260123P16.5 (Put): Strike $16.50, Expiry 1/23, IV 57.17%, Leverage 53.95%, Delta -0.295, Theta -0.0055, Gamma 0.211. This put offers high leverage and moderate delta for a bearish move. Projected payoff at 5% downside (ST = $16.48): $0.02.
• RIVN20260123C16 (Call): Strike $16, Expiry 1/23, IV 71.82%, Leverage 10.86%, Delta 0.761, Theta -0.0801, Gamma 0.151. This call balances time decay and gamma for a potential rebound. Projected payoff at 5% downside: $0.00 (out-of-the-money).

Aggressive bears may consider RIVN20260123P16.5 into a breakdown below $16.50, while cautious bulls might test RIVN20260123C16 for a bounce above $17.51.

Backtest Rivian Automotive Stock Performance
The backtest of Rivian Automotive (RIVN) after an intraday plunge of -8% 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 after the intraday plunge.

RIVN at Critical Juncture: Watch $16.50 Support and Sector Sentiment
RIVN’s 7.9% drop reflects a perfect storm of analyst skepticism and sector-wide headwinds. While the RSI suggests oversold conditions, the stock’s -5.63 PE and $14.48 200-day MA indicate deeper structural risks. Investors should monitor the $16.50 support level and UBS’s $15 price target. Meanwhile, Tesla’s -2.3% decline highlights broader EV sector fragility. A breakdown below $16.50 could force further downside, but a rebound above $17.51 might attract short-covering. Act now: Short-term bears prioritize RIVN20260123P16.5; bulls test $17.51 for a bounce.