There were a handful of positive takeaways when Rivian Automotive (RIVN -2.06%) released its third-quarter report last night. That helps explain why the stock jumped almost 8% in Wednesday morning trading.

But Rivian shares have since given up all those gains and then some. In mid-afternoon trading, the stock was lower by 3.7% on the day. It's fair for investors to wonder what caused the pop and then drop.

Questions about EV demand

It first should be noted that Rivian stock has dropped by more than 30% over the last three months. That can be partially explained by growing concerns that the market for electric vehicles (EVs) isn't what some investors were expecting. Even EV leader Tesla missed production and delivery estimates when it reported earnings last month.

So when Rivian increased its full-year production estimates last night, implying demand for its vehicles remains strong, investors' first reaction was to cheer. That is indeed positive news. Rivian has boosted projections for vehicle production twice this year, and now expects to manufacture 54,000 EVs in 2023.

Those EVs are selling, too. The company generated over $1.3 billion in revenue in the third quarter. That means each vehicle delivered represented nearly $86,000 in sales. That may be where investors got concerned. That's down from almost $89,000 per vehicle in the previous quarterly period. That could reflect the increasingly competitive market for EVs. It also reminds investors that Rivian is selling into a high-end market with limited mass appeal at that selling price.

Investors still want results

Rivian boosted guidance and even said it will begin selling its commercial vans beyond its lone customer, Amazon. But the fact remains that it reported a negative free cash flow of more than $1 billion in the third quarter. That's not a surprise, though, and was even better than expected. But it's still a reminder that the positive news was really just potentially positive news.

Rivian is still a very speculative stock. It will need to spend billions more to grow its production and even approach profitability. While it remains on a good path, investors who first bid up shares this morning realized much more is needed for sustainable success.