Shares of electric-vehicle maker Rivian (RIVN 3.14%) have been up and down in 2025. That's a pattern that might make some investors cautious. But when we take a longer view, I think there's a terrific investing story here, even though recent sales trends haven't looked encouraging.
Rivian's growth hasn't stalled -- it's in a lull
A quick take on Rivian might be, "Eh, the company's sales seem stuck at around 50,000 a year, and that isn't enough to be profitable. In fact, its deliveries were actually down slightly in 2024 versus 2023. Without growth, this thing is doomed."
That take would be missing something very important: Rivian's sales stand an excellent chance of growing dramatically soon, thanks to an important new model that's currently under development.
Rivian's upcoming R2 is a midsize electric SUV. It's expected to start around $45,000 when production begins in the first half of 2026. Image source: Rivian.
That's the R2, the long-awaited lower-cost Rivian. Expected to start around $45,000, Rivian's plan for the R2 is to bring its great range, thoughtful features, and off-road prowess to market in a slightly smaller package -- and, crucially, a package that's significantly less expensive to manufacture.
Rivian has been hard at work on the R2, of course. At the same time, while sales of its existing R1-series models and commercial vans haven't been growing much, Rivian has been very busy making them less expensive to produce while simultaneously making them better vehicles. Rivian said last month that its cost of goods sold per vehicle dropped by more than $22,600 in the first quarter from a year earlier, even as it rolled out new features.
Rivian also said last month that the R2's development is on schedule, by the way. That's a bigger deal than you might think. Developing a new vehicle and preparing to manufacture it at scale is a years-long, hugely expensive process. For a company like Rivian to be on track at this still-early stage of its existence is a testament to the adept leadership of CEO RJ Scaringe and his management team -- and that's always a bullish indicator.
Rivian's numbers: They're quite good in context
Rivian isn't profitable yet, but it wasn't expected to be profitable by now. It's still using cash -- $188 million in the first quarter, along with $338 million in capex -- but it has had positive gross profit for the last two quarters, thanks to those falling costs. Last month it confirmed it still expects to have a modest positive gross profit for the full year, despite the impacts of tariffs and policy changes.
Meanwhile, it has plenty of cash on hand, $7.2 billion as of the end of March, and more coming very soon. As part of the $5.8 billion joint-venture deal it signed with Volkswagen (VWAGY -0.28%) last year, Rivian is expecting an incremental $1 billion investment by the end of June.
That should be more than enough, Rivian has said, to get R2 production up to speed and to launch an additional model line, the even-smaller R3 series, likely in early 2027. By then, the company should have meaningful positive free cash flow.
It's also worth noting that Rivian plans to sell the R2 in Europe, a big potential source of additional demand that should help insulate it from any EV policy changes that might be forthcoming in the United States.
The takeaway: If you want an EV stock, Rivian is a nice choice
I've always liked Rivian as a company, and at recent prices it's easy to recommend as an investment. Having spoken with Scaringe and other Rivian executives several times over the years, I feel that this is a confident, well-run company that walks its positive, environmentally responsible talk -- and it's on track to become nicely profitable within a few years.
