When you look at young electric vehicle (EV) companies like Rivian Automotive (RIVN 0.38%), they seem like great opportunities at first. They've usually got a solid product that gets good reviews. But in terms of financials they're often on shaky ground. That's why, despite the potential of any of these EV companies, Tesla (TSLA 3.78%) and Ford Motor Company both look like stronger EV plays right now.
And while it certainly is doing far better than Lucid, I don't think Rivian is a good investment right now. It has potential, but at present there's too much risk.
NASDAQ: RIVN
Key Data Points
Conductive current
The American EV market is an odd place. It's utterly dominated by Tesla, which controls 43.1% of the market, and then there's everybody else. General Motors, Ford, Hyundai, and Volkswagen are the other top players and collectively make up another 31.6% of the EV market.
Rivian did put in a good showing for itself last year. It ranked sixth place by EV sales behind BMW and ahead of Honda.
It has potential and it's gaining traction. Still, it sells less than half the EVs that second place Chevrolet (owned by General Motors) sold in 2025 and less than a tenth the nearly 600,000 EVs Tesla sold in 2025.
Image source: Getty Images.
The end of the EV tax credit late last year put a damper on sales of EVs in the United States. Sales for EVs across the board were down 36% from Q4 2024. But overall EV sales in 2025 were down only slightly from 2024.
Slowing sales at the end of 2025 have seen most legacy automakers push back their plans to introduce more EVs to the market, but the segment isn't going anywhere, as EV costs are coming down and their ranges are increasing.
That's why there's hope for Rivian, especially as it seems to be going the Tesla route. The company currently only sells one model, the R1, which can be had as a truck or an SUV, and they both start in the $70,000 range.
However, this year Rivian is introducing the R2, which is a more affordable SUV that starts at $45,000. The company also has a planned R3 model, which is a smaller crossover. Anyone who is a fan of '80s rally cars will probably dig it.
But the money is what's keeping me less than optimistic about Rivian and it's why I don't think it's worth looking at just yet.
Electrical resistance
The good news for Rivian was that in its latest quarter, the third quarter of 2025, revenue hit $1.5 billion, up 78% over Q3 2024. Consolidated gross profit also hit $24 million for the quarter, an improvement of $416 million.
The bad news is that the company still ran a large $2.75 billion loss for the first nine months of 2025. It's an improvement over the $4 billion loss in the first nine months of 2024, but still quite steep.
And, despite an improvement in gross profit for Q3 2025, Rivian's gross margin is just 2%, which is razor thin even in the auto industry. Tesla, for instance, has a gross margin of 17% and an operating margin of 5%. The company also has a net cash position of $4.4 billion to nearly $5 billion in debt, which is concerning.
In all, Rivian could become a success story like Tesla; we'll have to see how the launch of the lower-cost R2 goes and the R3 after it. But right now Rivian is on shaky ground and I think it's a wait-and-see sort of company.
