It's a reasonable concern for Rivian Automotive (RIVN +0.57%) investors that the company has no real visible catalysts in 2025. The R2 won't launch until 2026, Rivian already inked a big deal with Volkswagen Group, and also landed a Department of Energy loan to fund its second plant in Georgia. The concern is without a catalyst the stock could lag the markets in 2025 if electric vehicle (EV) sales stagnate in the U.S. But there could be a forgotten catalyst in 2025 and Rivian just made a small announcement about it.
Forgotten, but not gone
For most investors, Rivian became a much more known entity when it inked a deal to supply retail juggernaut Amazon with electric delivery vans (EDVs). The deal, which called for Rivian to deliver 100,000 EDVs to Amazon by 2030, has gotten off to a slow start with the latter only using about 20,000 in its fleet currently.
Then Rivian and Amazon announced that the deal was no longer exclusive and Rivian was free to sell its EDVs to other companies. That was a big deal. Then the hype faded and the topic went nearly silent. The reason behind the silence was fairly simple: These are big decisions for companies and it takes time to test and run pilot programs. Rivian did give investors a little nugget that it was testing with AT&T, but then more silence.
NASDAQ: RIVN
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Enough silence
Finally, in a moment some investors have been waiting for, Rivian announced Monday it was officially opening up orders for its Rivian Commercial van to fleets of all sizes. "Over the last year we have been focusing our efforts on testing with some larger fleets, and we're really pleased with how those trials have gone," Tom Solomon, senior director of business development for Rivian, said in a press release.
The move signals to investors two things: Its part supply shortage is comfortably in the past, and it has a path to growth outside of its trucks and SUVs. In fact, Ford Motor Company is seeing success with its E-Transit van sales, which jumped 64% in 2024 to 12,610 units. That's growth and volume that Rivian investors would love to add through deals large or small.
Officially opening for orders is a great move and at the right time as the company lacked obvious catalysts this year. Last-mile delivery, an industry zeroing in on EVs to lower costs, continues to grow and should fuel demand for Rivian Commercial vans. It takes some imagination to compare Rivian and Ford, but remember that Ford Pro, the automaker's commercial division, generated $9.02 billion in earnings before interest and taxes (EBIT) in 2024 at a 13.5% margin. For comparison, Ford Blue, the company's traditional business, generated a lesser $5.28 billion at a 5.2% margin. This is just to say commercial vehicles can be a great business.
To be fair, Ford sells a lot more commercial vehicles than just vans, and electric vans still take up a small fraction of the overall retail market. But with some imagination you can see why investors are eager for Rivian to ink its next fleet deal for its commercial van.
Is there a catch?
There is a potential catch, however. It seems that the relationship between Rivian and Amazon isn't as strong as it once was, when the agreement was exclusive, and that could be a problem if Amazon's interest in owning Rivian shares wanes. Amazon's investment in Rivian has been volatile and if it decides to unload its roughly 16% stake in the company it would certainly weigh on the latter's share price.
But for long-term investors the far more important takeaway is that Rivian has completed sufficient testing and piloting programs to really begin selling its commercial van -- and if it inks a deal in 2025 it could be just the catalyst the stock needs to drive higher.
