Rivian Automotive (RIVN +1.25%) is attempting to catch some of the lightning that propelled Tesla to global success in the electric vehicle (EV) market. That's the opportunity that investors saw when Rivian went public, pushing the shares dramatically higher. Now, with the stock down 90% from its all-time highs, the investment story looks a little different.
Is Rivian a buy now, while the shares are hovering a bit below their 52-week high of roughly $18?
What has Rivian achieved?
To be fair to Rivian, the decline in the company's stock largely reflects investor sentiment. Fickle investors were willing to pay just about any price for an electric vehicle stock when Rivian went public. Then it became clear that not every electric vehicle company would be the next Tesla, and investors rushed to sell their shares. As is often the case, the selling was indiscriminate.
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To be fair to often mercurial investors, industry competition has increased materially since Tesla effectively created the EV market. Today, every major car manufacturer is making EVs. And then there are a host of upstarts trying to utilize the technology to enter the market as well. Rivian is just one of the many upstarts. Investors are probably correct to be less positive about Rivian's story today than they were a few years ago.
However, Rivian has, so far, proven to be a survivor. More than that, it has consistently achieved its key objectives. For example, it makes award-winning trucks. It has achieved production at scale. It has managed to turn a gross profit, earning more from the sale of its cars than it costs to build them. These are all important steps on the way to becoming a profitable electric car company. What Rivian has achieved is truly impressive.
Rivian has had a lot of help, with more to come
One of the keys to Rivian's success has been the partnerships it has inked with Amazon and auto giant Volkswagen. Rivian manufactures electric delivery trucks for Amazon, which has provided it with a key source of revenue while it builds out its manufacturing capacity. Those trucks are now being sold to others. Going forward, however, the prime partnership to watch will be Volkswagen.
Volkswagen has been providing capital to Rivian as it reaches key development milestones. The hope for both companies is that Rivian technology will find its way into Volkswagen cars. That would save the auto giant from having to develop the tech in-house and would give Rivian a major customer for its technology. This could be a solid foundation for Rivian as it seeks to reach profitability.
NASDAQ: RIVN
Key Data Points
The next major test, however, will be the R2, Rivian's lower-cost, mass-market truck. Production is expected to come online in 2026. This is a huge capital investment for the company. But thanks to Rivian's partnerships, it is almost certain to achieve this goal. That's highlighted by the fact that there was roughly $7.5 billion of cash and short-term investments sitting on Rivian's balance sheet at the end of the second quarter of 2025. Notably, Tesla followed the same path, first producing a high-end car and then bringing out a mass-market vehicle.
Still, the success of the R2 will be what investors want to watch. If the vehicle sells well, Rivian could carve out a place for itself in the highly competitive auto industry. If the R2 isn't well received, then the future looks fairly bleak for Rivian as a stand-alone business. If you buy the stock at recent prices, which are only a bit below the 52-week high of $18, you are betting that sales of the R2 will be strong.
Only the most aggressive investors should buy Rivian
From a glass-half-full perspective, Rivian has achieved so much that it seems like a mistake to bet against the company. However, the glass-half-empty view is also important to consider, as there is still a lot to be done before it becomes a sustainably profitable business. With so much riding on the success of its new model in 2026, only the most aggressive investors should probably consider taking on the risks associated with buying the stock today.
