Here's Why I Wouldn't Touch Rivian With a 10-Foot Pole

Rivian (NASDAQ: RIVN) received a lot of fanfare leading up to its 2021 IPO, but the stock has since crashed by about 80%. The luxury electric vehicle (EV) maker doesn't have the same clout as Tesla (NASDAQ: TSLA), and it faces several headwinds that suggest future market underperformance.

While Tesla is the leading EV stock and is tapping into new ventures like humanoid robots and cyber cabs under Elon Musk's leadership, Rivian doesn't have as many opportunities. Its bread and butter -- EV sales -- will also likely take a big hit in 2026. Here's why Rivian stock doesn't look good for long-term investors.

The EV tax credit's expiration is already hurting sales

Image source: Getty Images.

The U.S. EV tax credit was a major incentive that fueled the demand for electric vehicles. This tax credit gave people a monetary incentive to buy EVs. However, that tax credit expired on Sept. 30, 2025, and it had an immediate effect on the entire industry.

Rivian vehicle deliveries dropped sharply in the fourth quarter, going from 14,183 in Q4 2024 to 9,745 in Q4 2025. However, Rivian was losing ground before the tax credit went away, with full-year production and delivery numbers both down year over year. While the tax credit's expiration made things worse, the company still would have ended with year-over-year delivery declines if the tax credit had remained intact.

This slowdown isn't a blip. It remains a structural part of Rivian's current business model. EVs as a whole are losing momentum, with Tesla also delivering fewer vehicles year over year.

The third quarter was a fluke

Some Rivian bulls may argue that the luxury EV maker is back after delivering 78% year-over-year revenue growth in the third quarter. That number looks good on the surface, but it reflects buyers rushing to buy Rivian vehicles right before the EV tax credit expired. Deliveries immediately dropped year over year once that tax credit expired, demonstrating that Q3 was a fluke instead of an indicator of the company's future.

Rivian makes some money from software, and that segment of the business is growing quickly. However, automobile sales still represent more than 70% of total sales. Furthermore, software sales depend on people having Rivian vehicles already. If automobile sales slow down, software revenue will also decelerate.

The company's status as a luxury EV maker may also work against it. As people's wallets get tighter, more people are looking for used cars and entry-level new models. Decreased financial incentives for EVs and a preference toward affordable vehicles present a double whammy for Rivian.

You can find growth stocks with higher potential and less risk than Rivian. Things don't look great for the EV maker heading into 2026, and I wouldn't touch it with a 10-foot pole.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.