DA Davidson downgraded Rivian to underperform on Tuesday, citing concerns about the electric-vehicle maker's aggressive expectations for its upcoming R2 model. Analyst Michael Shlisky lowered the firm's price target to $14 from $15, warning Rivian must deliver "the best mid-size EV launch since 2021" without tax credits or a mass-channel dealer network.

The downgrade follows Rivian's projection of 20,000 to 25,000 units for the R2 launch in 2026. Only the Mustang Mach-E has achieved comparable debut-year volumes, benefiting from a $7,500 federal tax credit and extensive dealer support that Rivian lacks. Analysts acknowledged early reviewers appear to love the vehicle but warned "a lot has to go right."

Rivian's fourth-quarter results showed mixed performance. Adjusted EBITDA of -$465 million beat expectations, but $1.29 billion revenue fell short of the company's own estimate. The company guided for 62,000 to 67,000 vehicle deliveries this year with adjusted EBITDA losses between -$2.1 billion and -$1.8 billion.

Despite acknowledging the R2's strong product potential, DA Davidson highlighted significant risks including a hesitant consumer base, reduced government incentives, and low oil prices. The analysts expect autonomy upgrades to be integrated but warn "a lot has to go right for the near-term outlook to be met."