NEW YORK, Jan 7 — Rivian Automotive Inc's stock briefly tumbled below its IPO price yesterday in a selloff along with other electric vehicle makers as the race for market share intensifies and legacy companies ramp up their own production.

Rivian fell as low as US$75.13 (RM316.68), below its November initial public offering price of US$78 for the first time. The stock pared losses and ended down about 3 per cent at US$87.33.

Competing EV makers Tesla Inc, Lordstown Motor and Fisker fell between 2.1 per cent and 3.3 per cent, with high-flying growth stocks under pressure from expectations the US Federal Reserve could raise interest sooner than previously thought.

"Rivian investors need to keep near-term expectations managed,” Morgan Stanley analyst Adam Jonas cautioned in a note to clients. "Tesla has shown us the extremely difficult path to ramping EV manufacturing. You can’t have the reward without the pain.”

Jonas rates Rivian's stock "overweight.”

Rivian's stock has slumped about 14 per cent since the start of Wednesday, when Amazon.com Inc, one of Rivian's biggest investors, said it teamed up with carmaker Stellantis NV .

The two companies will develop cars and trucks with Amazon software and deploy electric vans made by Stellantis on Amazon's delivery network.

U.S. shares of Stellantis rose 2.5 per cent yesterday and are now up 11 per cent in 2022.

Rivian signed a contract in 2019 to build 100,000 electric delivery vans for Amazon by 2025. But now the electric commercial vehicle business, a vital market for Rivian, is becoming more crowded.

Rivian said on Thursday it expects Amazon to buy vehicles from many providers and that its partnership with Amazon is intact.

General Motors Co's electric commercial vehicle business, BrightDrop, has signed deals with Walmart Inc and FedEx Corp, while Ford Motor is expected to deliver its E-Transit cargo van to customers this year.

Meanwhile, General Motors Co this week unveiled its electric Chevrolet Silverado pickup, while Ford said it is ramping up production of F-150 Lightning. Both pickups would compete with Rivian's R1T at a time it is struggling to stick to delivery dates due to chip supply constraints.

Ford's stock has soared 18 per cent year to date and is now at its highest level since 2001. GM has rallied 7 per cent in 2022.

"(Rivian) investors are probably getting a little spooked by the legacy industry making a comeback,” said Guidehouse Insights analyst Sam Abuelsamid.

Rivian, which lost US$1.2 billion in the third quarter, is expected to deliver cars to customers this year. Production at its second plant in Georgia, in which it has invested US$5 billion, is likely to begin only by 2024.

"It's still sort of unproven in terms of investability of that as a stock versus some of the other names like Tesla, and arguably Ford,” said David Keller, chief market strategist at StockCharts.com. — Reuters