Rivian Automotive (RIVN 2.29%) is still building out its electric vehicle business. That's not to suggest that the company hasn't already made impressive achievements, which it has. The problem is that building cars is a capital-intensive endeavor, and Rivian has yet to achieve sustainable profitability. Despite its success, 2026 is poised to be a pivotal year for the business. Here's what you need to know.
What does Rivian do?
At the most basic level, Rivian is an automaker. However, that's not the full picture, because the company only makes electric vehicles (EVs). That's the same wedge that allowed Tesla (TSLA 0.16%) to break into the highly competitive automotive industry, a sector long dominated by a small number of very large companies.
Image source: Getty Images.
What Tesla achieved is a bit different from what Rivian is trying to do. Essentially, Tesla created the EV market. Rivian is attempting to follow the path that Tesla has already blazed. The big difference now is that all of the major automakers are building EVs today. Additionally, there are large EV manufacturers that have already followed Tesla's lead and established substantial businesses. Simply put, Rivian faces significantly more competition in an industry that requires substantial capital investments just to gain entry.
So far, Rivian has done an impressive job of building its business. It has well-respected delivery trucks that are used by Amazon and an award-winning high-end truck for the consumer market. It also has a key partnership with auto industry giant Volkswagen that's providing it with cash and, potentially, could lead to Volkswagen being the first customer for Rivian's EV technology.
Why 2026 is so important
Rivian still needs to gain scale in the consumer market if it hopes to be a long-term competitor in the auto sector. To that end, it's working on a new truck, called the R2, which will be lower in cost and targeted at the mass market. The game plan is to have production of the truck begin in mid-2026.
Rivian ended the third quarter of 2025 with roughly $7 billion of cash and short-term investments on its balance sheet. It's highly likely that it will get the R2 to market with little to no problem. The real issue will be how the market receives the R2.
NASDAQ: RIVN
Key Data Points
It will take a few quarters to get a feel for how well the R2 is selling. If sales are brisk, Rivian's future as a business will look a lot more promising. If the buying is weak, however, Rivian could struggle to survive as a stand-alone entity. Given the relationship with Volkswagen, it wouldn't be surprising to see Rivian be acquired by another company. Volkswagen would be the most obvious buyer, but it might not be the only one interested in Rivian's technology.
The next year will tell investors a lot about Rivian's business. The problem is that the expiration of U.S. subsidies for EV buyers could be a significant headwind, even for lower-cost EVs. In Q3 2025, ahead of the end of the subsidies, Rivian produced 10,720 vehicles and delivered 13,201. In the fourth quarter of 2025, after the expiration of the subsidies, the company produced 10,974 vehicles and delivered 9,745.
There was likely a pull forward of demand in Q3, so it isn't yet clear how bad the Q4 delivery numbers are. For investors, it will be important to monitor the delivery trends as they unfold in the first half of 2026. If demand remains weak, the future of the R2 may not be as positive as the company is hoping it will be.
Rivian is not for the risk-averse
The next year could be an important turning point for Rivian's business. Currently, it remains a money-losing start-up that is incurring significant expenses to build out its business. If the R2 doesn't succeed as hoped, Rivian will struggle to turn a profit sustainably. With a mid-year launch, the R2 is the next significant hurdle that investors need to monitor. Given the stakes involved, all but the most aggressive investors should probably remain safely on the sidelines.
