Rivian Automotive's (RIVN -0.92%) stock has been volatile in 2025, but shares have climbed back to the mid-teens recently as investors look ahead to a crucial new model cycle. The electric vehicle maker, best known for its R1S SUV and R1T pickup, is still early in its life as a public company, and its investment case hinges on scaling production while pushing unit costs lower.
That's the backdrop for a simple question: Does the current price offer an attractive entry point, or are expectations a step ahead of fundamentals? The answer depends on how you weigh near-term losses against the R2 launch and a deepening relationship with Volkswagen.
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Recent results show progress mixed with real pressure
In the second quarter of 2025, Rivian reported revenue of about $1.3 billion, up from roughly $1.2 billion a year ago, but gross profit swung back to a loss as production fell and costs rose. The company produced 5,979 vehicles and delivered 10,661, noting that output was limited by supply chain complexities, tied in part to trade policy shifts.
Importantly, management kept full-year delivery guidance intact at 40,000 to 46,000 vehicles, but widened its 2025 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss outlook to between $2 billion and $2.25 billion and lifted capital expenditure guidance to $1.8 billion to $1.9 billion. That combination -- a steady unit outlook alongside deeper losses -- captures the current trade-off.
There are encouraging signs under the hood. After two quarters of positive gross profit late last year and in the first quarter, management is still targeting cost reductions as it prepares the next wave of vehicles. And the balance sheet picture improved at quarter end, when Volkswagen funded a $1 billion equity investment at a premium to Rivian's 30-day average share price -- the first tranche of an agreement that could total up to $5.8 billion.
Perhaps the most important news from the quarter was that the company started installing manufacturing equipment ahead of the production of its new R2 vehicle.
Execution is key
The core debate, however, is whether today's valuation fairly discounts the time and risk between here and break-even economics. With the stock around the mid-teens and the company's market capitalization at about $19 billion, as of this writing, the stock is priced to achieve substantial profitability, even though it is far from doing so.
That can work if R2 -- the smaller, more affordable SUV slated to be built in Normal, Illinois -- launches on time, benefits from a materially lower bill of materials, and scales quickly. Management says R2 preparations are on track, with commissioning of the new line expected this year and a brief September shutdown to raise annual production capacity to roughly 215,000 units. If that plan holds, unit economics should improve as volume rises.
But there are risks investors can't ignore. Policy changes are pressuring affordability and Rivian's guidance -- management explicitly cited regulatory credits and trade actions when it increased its loss outlook. Additionally, any hiccup in the R2 ramp could push out the path to breakeven.
Finally, the capital required to fund this transition is significant. Even with Volkswagen's help, Rivian still needs to manage cash burn while investing heavily in product, manufacturing, and autonomy features.
Ultimately, Rivian is not a "set-it-and-forget-it" story yet. The company has a compelling product, a clear plan to reduce costs, and real strategic support from a global automaker. Those are meaningful positives. However, the investment case still leans on what happens in 2026 and 2027 -- not what the income statement shows today.
For investors comfortable with execution and policy risk and willing to hold through potential volatility as R2 ramps, the current price could be a reasonable way to participate in the upside if Rivian hits its milestones. For more conservative investors, it probably makes sense to keep Rivian on a watch list and look for either a better entry point or firmer evidence that gross margin and cash burn are on a durable path toward improvement.
