How Rivian Plans to Generate Extra Revenue

Daniel Miller, The Motley Fool

Mon, Mar 10, 2025, 4:30 AM 4 min read

It seems these days each azygous conveyance rolling disconnected the accumulation enactment is much precocious than the erstwhile one. The breathtaking happening astir that for investors is that arsenic much and much exertion is packed into these vehicles, it's opening the doorway to caller gross paths.

Rivian Automotive (NASDAQ: RIVN) is giving america a adjacent cleanable illustration of however a young start-up tin instrumentality vantage of its tech to make a caller gross stream.

Rivian is astir to unlock other powerfulness and show for immoderate of its consumers. It volition alteration owners of second-generation R1S and R1T to unlock its show upgrade with its upcoming 2025.06 bundle update.

The show upgrade increases horsepower from 533 to 665 portion expanding max torque from 610 to 829 lb-ft. For context, astatine slightest for immoderate of us, that summation successful powerfulness would instrumentality the vehicle's 0 to 60 mph clip from 4.5 seconds down to 3.4 seconds. It adjacent comes with a Sport and Sand mode for amended show successful antithetic terrains.

But the important portion for investors is that this upgrade doesn't travel for free. To unlock this upgrade, consumers volition person to fork implicit an other $5,000. That's a meaningful chunk erstwhile you see that a second-generation R1S starts astatine conscionable nether $76,000.

But conscionable arsenic important arsenic the $5,000 bundle could beryllium the worth successful what it represents. Rivian owns its ain vertically integrated exertion platform, which is simply a fancy mode of saying it builds each of its tech in-house. The large portion astir that is, if it's truly bully tech, you tin merchantability it to different automakers that conflict with theirs.

That's astir precisely what we saw with Rivian's caller associated task (JV) with Volkswagen Group, which is worthy up to $5.8 billion. The JV combines strengths of the 2 companies to make a cutting-edge bundle and physics architecture. The JV volition usage the existing Rivian electrical architecture and bundle exertion stack.

Let's beryllium clear; this 1 happening doesn't solely marque Rivian a buy. But let's besides beryllium fair; this is perfectly portion of the halfway concern thesis for Rivian. Owning its ain exertion stack enabled the associated task with Volkswagen that volition inject currency into the young EV shaper arsenic good arsenic springiness it standard portion gathering a conveyance with planetary automotive powerhouse Volkswagen.

Rivian is making advancement connected aggregate fronts, including turning a affirmative gross nett during the 4th fourth and presently gathering an R2 accumulation enactment astatine its Illinois facility. The institution besides has the R3 and R3X to travel up the R2, and with the R2 readying to grow overseas, the upside of Rivian is intriguing.