Shares of electric vehicle (EV) maker Rivian Automotive (NASDAQ: RIVN) sank Wednesday after rising early in the week on the brief resurgence of interest in meme stocks. As of the close of trading, Rivian was down by about 8.9% from Tuesday’s closing price — but still up about 2% since the end of last week.
The meme stock revival faded on Wednesday
This has already been quite a week for followers of meme stocks — the group of heavily shorted stocks that surged earlier this decade following aggressive promotion by social media personalities and others who hoped to cause short squeezes.
The group had a brief revival on Monday and Tuesday after a Reddit user who came to prominence in the initial run-ups posted on social media for the first time in roughly three years.
Rivian, like several other EV companies, had a moment as a meme stock. It had a huge run-up shortly after the automaker’s initial public offering in late 2021, briefly giving Rivian — which had only just begun production of its first vehicle — a market cap of more than $100 billion.
Rivian is out of the hype phase and into the grind
Things have changed a lot since then. While Rivian is now an established EV brand, having delivered roughly 100,000 vehicles, its market cap of $10.2 billion is just a fraction of what it was at its peak.
Why? Lots of reasons. Among them: Reality has set in. Rivian isn’t yet close to sustainable profitability, and getting there will be a costly grind.
Right now, Rivian is aiming to finish developing the first vehicle on its new, smaller, less-expensive platform. The company has told investors it expects to begin production of that vehicle, the R2 SUV, in the first half of 2026.
Rivian’s path to profitability is clear — it’s just long
There’s a good chance that the $45,000 R2 — and the even smaller R3 that will follow — will be the vehicles that give Rivian the scale to become profitable in the long term. And we should note that Rivian isn’t in acute danger of going broke: It recently confirmed that it has enough cash on hand to get the R2 into production, and it’s working hard to lower its costs in the meantime.
CEO RJ Scaringe and his team are doing just about everything right. But Rivian investors waiting for a real return to rocket-like share price growth will probably have to wait another couple of years at least.
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John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Rivian’s Stock Has Already Had a Wild Week, but the Story Hasn’t Changed was originally published by The Motley Fool
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