Editor's note: This article has been corrected. A $1,000 investment cut by 62.5% would now be at $375.

Every electric vehicle (EV) start-up wants to be the next Tesla, but this is easier said than done amid fierce EV market competition. It's even more challenging for a start-up like Rivian (RIVN 1.65%), which is trying to deliver powerful but pricey vehicles during a time of elevated inflation.

As the hype-fueled, pre-inflation days of 2021 recede further into the rearview mirror, it's only getting harder to build a bull case for speculative upstarts like Rivian.

Through the always crystal-clear lens of hindsight, it's instructive to consider the lost capital and (hopefully) gained wisdom that Rivian's loyal shareholders have collectively experienced. Then, the burning question becomes whether the stock has any real recovery prospects, or whether its investors will have nothing more than an expensive lesson in the end.

It's been a long, bumpy ride for Rivian's investors

Rivian went public in November 2021, and the first few weeks after its initial public offering were quite volatile. Therefore, we can bypass that brief period and start measuring the performance of the stock from a year ago.

It was more or less a $40 stock then, but recently traded below $15. For argument's sake, if we round that up to $15, shareholders would have lost 62.5% over the past year, and would have turned $1,000 into $375.

That's tough to swallow, and there's no consolation prize in the form of dividends (though one could say the same thing about Tesla and a slew of other publicly-listed EV manufacturers). There's also no price-to-earnings ratio to speak of since Rivian has never turned a profit, which makes it more challenging to determine whether the company's shares are overvalued, undervalued, or neither.

Rivian did manage to post four consecutive quarterly EPS beats. But these were all quarters with negative income numbers.

It's also not particularly confidence-inspiring that the company managed to burn through $2.62 billion of net cash in its operations in 2021, and then nearly doubled that figure to $5.05 billion in 2022.

Adding to the "it's cheap for a reason" column, Rivian's 2023 vehicle-production guidance of 50,000 fell short of Wall Street's estimate of 60,000 to 65,000. And fourth-quarter 2022 revenue of $663 million disappointed analysts, who had projected nearly $800 million in quarterly sales.

Rivian's green debt notes make some investors see red

The stock plunged 14.5% on March 7 with the announcement that Rivian plans to sell $1.3 billion worth of "green" convertible senior notes in a private offering; these debt notes will reportedly mature on March 15, 2029. 

The notes have some warrant-like properties because the holders will be able to convert them in certain circumstances and during specified periods into common stock or cash or both. (They're "green" senior notes because they support a clean-energy business.)

It's fine that Rivian might get a quick capital infusion, but it's not difficult to see why current stockholders weren't too pleased on the day of the disclosure. As frequently occurs when businesses sell large quantities of shares (or the right to buy them), those who already own the stock are concerned about potential share-value dilution.

These senior notes also have bond-like properties, and Rivian didn't mention the interest rate in the press release. Also, given Rivian's aforementioned cash-burn rates in 2021 and 2022, you have to wonder how long the extra $1.3 billion will last.

Rivian investors, who have had a 62.5% single-year loss, have a serious decision to make at this point. The decision to sell so many senior notes only bolsters the bearish thesis, and shareholders should consider cutting their losses -- or face what could turn out to be another harsh, loss-inducing year.