Toronto, Ontario — In this weekly Tuesday Ticker, Canadian officials get one step closer to a reported deal with Honda, while a market analyst roots for Rivian despite the company’s stock reaching all-time lows.
Handshake with Honda
Canadian federal officials are close to forming a deal that could see Honda build EVs in Ontario, according to an unnamed sourced cited by Bloomberg.
The deal is “imminent,” according to Bloomberg’s sources. The news site also said the deal’s completion could be announced within a week.
The Globe and Mail suggested in an April 17 report that a new tax credit providing companies a 10 percent rebate on new construction to be used in EV supply chains, noted in last week’s federal budget, is fueling speculation. The tax credit adds to Ottawa’s existing incentives, though the new incentive only applies to companies committed to investments in battery making, manufacturing components and vehicle assembly—i.e., “across the board investments,” as noted by the Globe and Mail.
It remains unclear where the EVs would be built; Honda already has a presence in Alliston, Ont.
Reports of this allegedly now-pending deal were first circulated by Japanese news group Nikkei, which reported Honda was considering an investment of up to $18.5 billion.
Don’t panic, despite pricing
A market analyst insists that Rivian is the “best-positioned EV OEM,” despite a “period of slower EV adoption,” and all-time stock lows.
Needham analyst Chris Pierce suggested a buy rating in a Thursday Markets Insider Report, noting that R1S used vehicle pricing came in “better than feared” in Needham’s EV OEM price tracker.
“Although price decreases are expected as used supply grows, we haven’t seen any data that points to a steep drop-off in demand,” said Pierce. “Overall demand has weakened, based on Rivian’s own commentary, but used vehicle price decline are in line with their historical averages.”
As of Monday at 10:30 a.m. E.T., shares of Rivian traded at US$8.61.
