Tesla-Rival Rivian Could Lose A Major Revenue Stream Due To a
Rivian Automotive Inc. may face a significant revenue loss due to budget cuts from President Trump's new bill, which relaxes Corporate Average Fuel Economy (CAFE) standards. This change could hinder Rivian's ability to sell Zero Emission Vehicle (ZEV) credits, potentially impacting its projected $325 million revenue for 2024. Despite this, Rivian has other revenue sources, including a minority stake in Also Inc., which recently reached a $1 billion valuation. Rivian continues to deliver vehicles, maintaining its guidance of 40-46k units for the year.
Rivian Automotive Inc. RIVN could lose a major revenue source as President Donald Trump's “Big, Beautiful Bill” introduced a flurry of budget cuts.
What Happened: The Tesla Inc. TSLA rival could potentially lose the revenue stream that helped it make $325 million in 2024 by selling ZEV credits, according to The Motley Fool on Sunday.
The new budget relaxes CAFE, or Corporate Average Fuel Economy norms, which stipulate that vehicles must be able to cover a certain amount of distance on a gallon of fuel. The norms also imposed fines on automakers who exceeded the norms.
To avoid paying the fines, automakers can either work on improving fuel economy or purchase ZEV credits from companies like Tesla and Rivian, which the government awards these companies for manufacturing vehicles that do not have any emissions.
Why It Matters: With the relaxation of these regulations, selling ZEV credits could become a challenge as automakers would become less inclined to purchase the credits from companies like Rivian.
However, Rivian has other streams of revenue as well. Recently, Also Inc., a micromobility company spun off from Rivian, hit a $1 billion valuation. Rivian has a minority stake in Also.
Rivian delivered over 10,661 units in Q2 2025 as the EV maker reaffirmed the yearly delivery guidance of 40-46k vehicles despite uncertainty posed by Trump's tariffs.
Rivian offers poor Momentum but scores well on the Value metric. For more such insights, sign up for Benzinga Edge Stock Rankings today!
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