Investor enthusiasm for electric vehicle (EV) makers has dimmed somewhat in recent months. One recent exception is pickup and utility van manufacturer Rivian Automotive (RIVN 6.10%), which saw its share price zoom after it reported its latest set of quarterly results.

Yet through all the newfound enthusiasm, I think some caution is warranted.

Roadblocks ahead?

Many stock rallies originate from estimates-beating quarters, and this was the case with Rivian.

In its first-quarter announcement, the EV maker revealed that its revenue leaped more than sixfold on a year-over-year basis to $661 million, only slightly below the average analyst estimate. It also beat on the bottom line, with its non-GAAP (adjusted) net loss of $1.25 per share trouncing the collective projection of a $1.61 shortfall.

So far, so good. But there were a few yellow traffic lights in that earnings report that were concerning.

A major one is Rivian's all-important production figure; this was actually down during the period when compared to fourth-quarter output (at 9,395 vehicles, for a 6% drop). With invaluable first-mover advantage with its R1T, the first EV pickup on the market, the company had great momentum behind it. What happened? 

In its earnings release, Rivian said that its commercial van production line was down for much of the quarter (due to the introduction of a new motor and battery technology). It added that it is still on track to hit its production goal of 50,000 vehicles this year, which would be double the 2022 figure.

But since its production regime is still relatively new, it could undergo other growing pains. And not meeting a production target would badly affect the newfound investor confidence that came with that earnings beat.

I'm also concerned with that bottom-line number. Yes, it narrowed more than many expected it to (to just under $1.17 billion on an adjusted basis, from first-quarter 2022's $1.28 billion), however Rivian is still well in the red. And while there's less scarlet ink than previously, $1.17 billion isn't a much more comforting figure than $1.28 billion. 

It also starkly demonstrates that the company has quite a way to go to reach substantially narrower losses, let alone profitability, even if that ambitious production goal is met.

There's comfort in the fact that Rivian ended the quarter with bulging coffers -- it held over $11 billion in cash and equivalents, more than enough to endure a sustained period of financial stress. It's also doing a fine job of reining in expenses, and higher production means lower costs per vehicle. But cash piles have a way of withering away quicker than expected when an enterprise keeps losing money.

Obeying gravity

Finally, I think Rivian-watchers should also monitor the current EV industry price war. The leading army in this fight is, of course, Tesla, which has made a series of price cuts since the beginning of the year. Rivian hasn't lowered its prices at all and hasn't indicated that it's going to, which could potentially leave it out in the cold.

First-mover advantage is great for a manufacturer. Unfortunately for them it rarely lasts, and competitors are coming for Rivian's lunch.

Ford, with the weight of the immense production and marketing/sales machinery behind it, is having success with its F-150 Lightning EV pickup. According to the incumbent carmaker, this was the No. 1 EV pickup on the market last December. If Ford is aggressive enough, it might also take the crown for 2023.

Tesla has yet to roll out its Cybertruck and although the futuristic styling won't be to everyone's taste, it is a Tesla. As such, it's sure to attract plenty of interest and more than a few customers that might otherwise opt for an R1T.

Since these pickups are coming onto the road in an environment of falling prices, it's very likely their costs will start to come down, too. Rivian has much less leeway for price chops than does a Ford or a Tesla.

All in all, I think Rivian's better-than-expected quarterly performance was encouraging and showed that the company is effectively and sensibly managed. The EV game is a tough one to win, though, and Rivian is still an underdog. Investors would do well to keep an eye on its cash resources and its pricing moves, such as they are, to gauge how effectively it's competing.