What happened
Shares of Rivian Automotive (RIVN -3.62%) spiked higher Tuesday morning after the EV start-up released its third-quarter production update. As of 10:45 a.m. ET, the stock was up 9.9%.
So what
Rivian produced 7,363 units in the third quarter and delivered nearly 6,600 of them. That represents an increase of 67% over Q2 production and keeps the EV maker on pace to finish the year having produced the 25,000 electric trucks it has as its goal.
Image source: Rivian Automotive.
Now what
Yesterday, Tesla disappointed investors with its quarterly delivery update, but it still posted growth of 42% compared to the prior-year period. Rivian is counting on that kind of growth in the overall market. Investors are gaining confidence that Rivian can become a major player in the industry given evidence that demand remains strong and the fact that it has been able to significantly ramp up production. It's especially encouraging for Rivian investors that the company could show that growth in an environment where supply chain disruptions have hindered many global automakers.
Today's move higher comes after the stock had dropped nearly 70% thus far in 2022. The 25,000 vehicle goal initially disappointed investors after the company previously said it had the equipment and processes in place to manufacture 50,000 in 2022, but was restricted by the availability of parts and materials.
Other EV makers have continued to reduce estimates as a result of those same challenges, and investors are gaining confidence in Rivian because it reaffirmed its annual production target again yesterday. Rivian still has a long way to go, but it has a solid order book and ended the second quarter with more than $15 billion in cash on its balance sheet. That has all combined to bring more buyers into the stock today.
