What happened

Even after sellers far outnumbered buyers on Thursday, the tech-heavy Nasdaq is heading into the final day of trading this week with a slight gain. That builds on a bounce that began in late January after the index reached correction level, along with many growth stocks.

That includes the stock of electric vehicle (EV) start-up Rivian Automotive (RIVN 0.18%), which jumped as much as 13.3% at its peak this week. After a pullback, Rivian shares are heading into Friday with a weekly gain of 6.3%, according to data provided by S&P Global Market Intelligence.

So what

Rivian was the subject of a New York Times article earlier this week that didn't paint a very positive picture of the company and its stock. It was also reported by EV news site InsideEVs that the company experienced a vehicle fire at its Illinois factory last weekend.

two customers standing in front of a Rivian R1T electric pickup truck.

Two customers with a Rivian R1T pickup. Image source: Rivian Automotive.

While that isn't in itself newsworthy, the report said a previous fire was reported in October 2021 that was caused by a vehicle battery, raising the possibility that another battery could have been involved. But the bad publicity was overshadowed this week with a public push by President Joe Biden to expand the growth of EVs, during which he specifically mentioned Rivian. 

Now what

Even with this week's bounce, Rivian shares have dropped almost 40% year to date. But that still leaves it valued at a market cap of over $58 billion. The Times article highlighted some early missteps by the company, including production delays and the departure of its chief operating officer that wasn't announced by the company at the time it occurred. 

With only about 1,000 vehicles produced as of the end of 2021, the valuation assumes virtually no mistakes. Even its relationship with early investor Amazon was called into question when the e-commerce giant announced it was also looking to acquire last-mile electric delivery vehicles from Fiat-Chrysler parent Stellantis. That doesn't look to be an issue for Rivian, however, and Amazon still plans to buy up to 100,000 of Rivian's delivery vans. It said it always expected to need multiple suppliers to satisfy its demand. 

Rivian also has more than 70,000 pre-orders for its R1T pickup and R1S SUV. The market for EVs is certain to continue to grow, as was highlighted by President Biden when he mentioned Rivian as he promoted domestic EV makers this week. Biden was touting the infrastructure spending bill and its $7.5 billion allocation for charging infrastructure to assist EV demand. 

The automaker next provides investors with a quarterly financial update on March 10. It will need to show that it has settled into steady production, and that demand has not waned for its products. Without those assurances, the valuation will still look high, and there could be more downside for the shares. For this week, however, investors are happy to give the stock some credit after its valuation reset to start this year.