Rivian Automotive (RIVN) is looking to challenge Tesla (TSLA), Ford (F) and General Motors (GM) with its adventure-styled electric vehicles. RIVN shares surged 40% in December 2023 but have come back to earth in 2024, falling 50%.
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Chief Executive RJ Scaringe on June 10 sold 71,429 RIVN shares for a market value of $820,883.50, according to regulatory filings. Rivian stock jumped 3% to 11.87 on June 10, and is up 8.7% on the month as of June 11.
Meanwhile, Adam Jonas, Morgan Stanley’s high-profile autos analyst, met with Rivian management in late May. The analyst came away from the gathering with the belief that Rivian is “uniquely positioned within autos (other than Tesla) on scaling a fully integrated software stack critical to unlocking the AI opportunity.”
“At a market value 1/60 that of Tesla,” Jonas added. “The stock’s direction is a balance of dilution risk vs. potential strategic partner re-rate.”
The analyst also wrote that Rivian head Scaringe cited the Volkswagen (VWAGY)-XPeng (XPEV) agreement as a “good example for a partnership model.”
“We note that while there are no announced negotiations/partnerships, the openness to such opportunity is positive,” Jonas said.
EV Startup Redesigns Lineup
Last week, Rivian announced it has revamped its pickup truck and SUV models.
Rivian said pricing for the second-generation R1S SUV will increase $1,000 from current models to start at $75,900, with the trimotor trim starting at around $106,000.
The starting pricing for the R1T pickup will remain at $69,900. However, the trimotor option will run around $100,000.
Rivian has not yet shared details on range and pricing for all the vehicle trims.
The company said Thursday it has changed more than half the hardware components for the updated products and reengineered its batteries.
“We continue to evolve our flagship R1 vehicles, offering quality and performance without compromise,” Scaringe said in a statement. “Our revamped R1S and R1T push the technical boundaries further, creating our most capable products to date.”
Rivian Stock: First-Quarter Results
Rivian reported reported a worse-than-expected loss in the first-quarter late on May 7 as the company lost $38,784 per vehicle delivered. Meanwhile, speculation has run rampant that Apple (AAPL) is looking to partner with the EV startup.
Rivian announced a loss of $1.24 per share in the first quarter, down from a $1.25 loss a year ago, while revenue increased more than 80% to $1.204 billion. Analysts predicted a loss of $1.15 per share in Q1 with sales totaling $1.17 billion.
Rivian ended Q1 with $7.858 billion in cash, cash equivalents, and short-term investments. Rivian ended Q4 with around $9 billion in cash. The EV startup said it “expects significant improvement in the material and conversion cost of its vehicles and remains confident in its path to achieving modest gross profit in the fourth quarter of this year.”
“First-quarter results exceeded our outlook and set a strong foundation for the remainder of the year as we focus on continued demand generation, delivering cost and plant efficiency improvements, advancing R2 development, and driving towards profitability,” Scaringe said at the time.
Rivian And Apple?
Ahead of earnings, Rivian stock swung higher after Taiwan-based Digitimes reported Apple could be exploring a partnership with Rivian, citing supply chain sources. Apple canceled its long-running “Project Titan” Apple Car in late February.
Scaringe said on the Q1 earnings call that Rivian wouldn’t “comment on market rumors or speculation.” However, he added that Rivian has a “history of partnership,” as Scaringe pointed to the investment from Amazon.com (AMZN).
“As we think about what we’ve built as a company, one of the core elements that makes this unique is just the level of vertical integration around our software and associated electronics platforms,” Scaringe said on the earnings call.
Following Rivian’s new product line unveiling in March, Jonas wrote that his “key question” is whether Rivian should “seek out a new strategic ‘sponsor’ before launching the ‘heavy lift’ phase of development or do they continue to ‘go-it-alone’ and potentially look for partners later phase.”
It is Jonas’ view that Rivian may benefit from a partnership to bring its new vehicles to market at scale.
Rivian Stock: Executive Change And Q1 Deliveries
In early May, Rivian announced it had hired Javier Varela as its new chief operations officer. Varela joins Rivian from Volvo where he served as chief operations officer and deputy chief executive officer.
Meanwhile, Rivian has also received $827 million from the state of Illinois to expand its Normal, Illinois plant.
In early April, Rivian announced vehicle deliveries in Q1 totaled 13,588 while it produced 13,980. For 2024, Rivian also reaffirmed previous guidance of producing 57,000 vehicles.
Ahead of the release, analysts expected the company to deliver 13,000 units. On Feb. 21, Rivian predicted that 2024 production would remain flat compared with 2023 while consumer and commercial vehicle deliveries will grow by low single digits in 2024.
The carmaker also forecast that vehicle deliveries in fiscal Q1 2024 would be about 10%-15% lower than in Q4 2023, which totaled 13,972. However, Rivian’s Q1 deliveries declined only 3%.
The Rivian Reveal
The EV startup unveiled the R2 — its smaller, cheaper, next-generation vehicle and platform — on March 7. The vehicle has an estimated starting price of $45,000 with expectations it will also qualify for the $7,500 Inflation Reduction Act (IRA) tax credit.
Rivian planned to produce the vehicle at its new factory in Georgia. However, the company halted construction of the $5 billion plant and is opening an R2 production line at its Illinois plant.
Production of the R2 platform is expected to begin in 2026 with deliveries set for the first half of 2026.
Rivian also announced the R3, a more compact crossover style vehicle that uses the R2 platform, and a high-performance R3X offering. The company has not mentioned pricing or delivery estimates for the R3 or R3X.
Rivian has said the R3 will be at a lower price point than the R2 and that deliveries for the R3X will begin after the R2.
Within 24 hours after the launch, Rivian said it received more than 68,000 reservations for the R2.
“I’m so excited about what it represents for us as a company in terms of achieving scale,” Scaringe said at the event.
On the Feb. 21 Q4 earnings call, Scaringe said that the “R2 represents the essence of our brand, while targeting the significant midsized SUV segment, a massive market with limited compelling EV options beyond Tesla.”
Analyst Adam Jonas Weighs In On Rivian Stock
After the event, Morgan Stanley’s Jonas wrote that the R3 reveal “stole the show.” However, the analyst also voiced caution.
“While Rivian excited the market with the unveil of its next 3 years of new product pipeline, investors may also want to contemplate the potential risks of showing too much,” Jonas said.
The analyst added that potentially just as important as the new products was the decision to pause its Georgia plant plans, which should save around $2.25 billion in capital spending.
“We believe the company may require significantly greater capital resources to commercialize the R2 and R3 model plan with confidence,” he wrote.
Jonas said his “key question” is whether Rivian should “seek out a new strategic ‘sponsor’ before launching the ‘heavy lift’ phase of development or do they continue to ‘go-it-alone’ and potentially look for partners later phase.”
Rivian’s Cash Question
RIVN shares dropped more than 25% on Feb. 22 after reporting fourth-quarter earnings and revenue, along with announcing layoffs.
Rivian saw a loss of $1.36 per share in Q4 with sales doubling to $1.31 billion. Analysts expected a loss of $1.35 and revenue totaling $1.28 billion. At the time, the carmaker also said it was laying off 10% of its salaried workers.
Tesla (TSLA) Chief Executive Elon Musk posted on X late on Feb. 21 that based on Rivian’s quarterly cash on hand, the company could go bankrupt in around six quarters.
Chief Financial Officer Claire McDonough told investors on the Q4 earnings call that Rivian remains “confident that our cash, cash equivalents and short-term investments can fund our operations through 2025.”
“We aim to maintain a strong balance sheet position by continuing to drive cost efficiencies and improve our vehicle unit economics, while opportunistically evaluating a variety of capital markets available to Rivian ranging across the capital structure,” McDonough said.
Rivian Stock Falters
Rivian ended 2023 on a high note as interest in electric-pickup trucks appeared to be picking up following initial deliveries of the Tesla Cybertruck. At the end of December, Baird even designated RIVN as a “best idea” for 2024. The firm wrote that Rivian has remained supply constrained relative to demand longer than several of its EV peers.
However, RIVN shares have dropped since then. The decline in 2024 comes after RIVN gained 40% in December 2023, moving above key levels of resistance and clearing an aggressive entry point.
In December 2023, AT&T (T) announced that starting in 2024 it will begin “piloting” Rivian vehicles in its fleet. AT&T expected to begin adding the Rivian Commercial Van and R1 vehicles to its fleet in early 2024. It is unclear how many Rivian vehicles AT&T will order. The company partnership also sees AT&T as the exclusive provider of connectivity to all Rivian vehicles, in the U.S. and Canada.
Rivian had reported during its third-quarter earnings it would allow more customers beyond Amazon, which remains a key buyer, to purchase its commercial electric vans.
Rivian currently prioritizing production of electric vans for Amazon. The online marketplace already has around 1,000 Rivian commercial vans delivering packages in major cities in the U.S. It has ordered 100,000 of Rivian’s electric vans.
Amazon currently has a 16.7% stake in Rivian, according to FactSet. However, Amazon is also looking elsewhere to electrify its fleet.
Rivian Stock: Tesla Cybertruck Competition Or Opportunity
Tesla delivered its first 12 Cybertrucks on Nov. 30. The long-awaited arrival of the new Tesla vehicle sent Rivian shares 7.6% higher the following day.
The EV giant is offering three trims of the Cybertruck, with the rear-wheel drive version starting at $60,990 with a 250 mile range.
The all-wheel drive version has a starting price of $79,990 with 340 miles of range. Tesla is also offering a top end trim, called the Cyberbeast, starting at $99,990 with a 320 mile range. Both the all-wheel drive version and the Cyberbeast have 2024 deliveries.
Four years ago, Tesla announced the price would start at $39,900 with Musk previously saying he wanted to price the base model under $50,000. Originally, Tesla and Musk stated the tri-motor Cybertruck would have 500 miles of range with the dual-motor model managing 300 miles and the base rear-wheel version getting 250 miles per charge.
The price point and the unique design language of the Cybertruck may lead more consumers to look at Rivian’s offerings.
Rivian Stock IPO
The EV startup currently produces an electric pickup-truck, SUV and commercial vans. Rivian makes its vehicles in Normal, Ill. The plant has a production capacity of 150,000 units annually. With the R2 production line, the capacity will total 215,000 units per year, according to Rivian,
Rivian rolled out the first all-electric pickup truck, the R1T, on Sept. 14, 2021, and its R1S SUV in the fall of 2022. The company launched with great fanfare on Wall Street.
On Nov. 9, 2021, the much-anticipated RIVN IPO priced strong, an upsized 153 million shares at $78 a share — above the expected range. Rivian stock has since fallen well below its IPO price.
Nevertheless, Rivian had a monster IPO, raising $11.9 billion and giving the company an initial valuation of roughly $77 billion. Rivian stock soared to 179.47 on Nov. 16, 2021, then sold off sharply over the following weeks and months.
Rivian Stock
RIVN surged after it announced its R2 and R3 productions. However, RIVN shares have tumbled 50% in 2024, dropping back below their 200-day. The stock is currently trading along its 50-day moving average and is about 84% below its IPO price of $78, according to MarketSurge analysis.
Rivian stock ranks eighth in IBD’s Automakers industry group. RIVN has a 28 Composite Rating out of 99. Additionally, the stock has a 13 Relative Strength Rating and its EPS Rating is 30 out of 99.
Rivian sales are picking up, but heavy losses are likely to continue for some time. Shares are down 50% in 2024 and it is trading along its 50-day line. For now, RIVN is still not yet a buy.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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