Rivian, Lucid to Benefit From Trump Tax Bill, BNP Paribas Says

Rivian and Lucid shares gained significantly Thursday following a BNP Paribas analysis suggesting they would benefit from a potential Trump tax bill eliminating the $7,500 electric vehicle consumer tax credit after September 30. While the bill is expected to reduce overall EV demand, BNP Paribas anticipates this change will disproportionately favor Rivian and Lucid, implying a competitive advantage for these manufacturers.

Analysis

Shares of Rivian Automotive (RIVN) and Lucid Group (LCID) experienced significant gains, rising by as much as 4.6% and 8.8% respectively, based on a BNP Paribas analysis. The bank's thesis is that these electric vehicle makers will be net beneficiaries of a proposed tax bill that would terminate the $7,500 consumer EV tax credit after September 30. This legislative change, already passed by the Senate, is projected to cause an overall decline in EV demand later in the year. However, the core insight from BNP Paribas is that the negative impact will not be uniform across the sector, suggesting a potential competitive advantage for Rivian and Lucid relative to other automakers under the new policy regime.

Key Decisions for Investors

• Investors should closely monitor the final passage of the tax bill through the House of Representatives, as this is the primary catalyst for the re-rating of Rivian and Lucid.
• Consider that the positive stock reaction is based on an analyst's forecast of a relative advantage, while the bill is also projected to cause an absolute drop in overall EV demand, creating a complex risk-reward scenario.
• Evaluate positions across the entire EV sector, as the removal of the tax credit is expected to create a significant performance divergence between automakers, potentially disadvantaging those more reliant on the subsidy.