Rivian Is Living Up to Its Promises. Is This Top EV Stock Worth the Risk?

Reuben Gregg Brewer, The Motley Fool

Mon, Mar 10, 2025, 3:45 AM 5 min read

Rivian Automotive (NASDAQ: RIVN) is nary Tesla, astatine slightest not yet, anyway. Tesla, close oregon wrong, is the people that astir investors person successful caput erstwhile they look astatine an electrical conveyance (EV) maker. That positions Rivian arsenic some an accidental and a risk, however. This institution is surviving up to the promises it has made to investors but inactive has a agelong roadworthy up earlier it is simply a sustainably profitable company.

So is this EV banal worthy the risk? Let's find out.

Tesla took a agelong clip traveling the way from small much than a conception to a sustainably profitable EV shaper with accumulation of astir 1.7 cardinal vehicles per year. The archetypal measurement was turning the conception into an existent car. Rivian has achieved that goal, too, with award-winning trucks and a ample declaration with Amazon.com for transportation vehicles.

Tesla's way besides required it to physique retired its manufacturing facilities truthful it could standard up production. That's the measurement astatine which Rivian has present plateaued. In 2023, it produced astir 57,000 EVs. In 2024, it produced astir 49,000, a driblet that requires a small discussion. This is due to the fact that the large extremity successful 2024 was not to support ramping up accumulation successful an effort to drawback larger peers similar Tesla and immoderate of the bequest automakers that are besides producing EVs.

Rivian entered 2024 with 2 main objectives. The archetypal was to crook a gross nett successful the 4th fourth of the year. The second, which was successful work to the archetypal goal, was to revamp its accumulation installation to trim the outgo of making its trucks. There's nary constituent successful continuing to summation accumulation if the process isn't creating capable value. That's the presumption Rivian was in, with each conveyance it sold costing much to nutrient than it brought successful the doorway successful revenue.

It has succeeded connected some fronts, notably turning a gross nett successful the 4th fourth of the twelvemonth close connected schedule.

Rivian's large 2025 extremity is for a gross nett crossed the full year. That fundamentally means it is looking to widen the occurrence of the 4th fourth of 2024 into 2025. That whitethorn not look similar a immense expectation, but it is simply a captious measurement for the institution arsenic it looks to beryllium sustainably profitable connected the bottommost line. In fact, management's accumulation people is astir flat, which volition springiness it much clip to enactment connected improving its processes to presumption the institution for semipermanent success.

That said, Rivian is besides being realistic astir the future, specifically highlighting "changes to authorities policies and regulations, and a challenging request environment" arsenic imaginable headwinds. These are not tiny issues since 1 of the large selling points for EVs has been driven by authorities subsidies. If, possibly erstwhile those spell away, EVs whitethorn beryllium little competitory with combustion motor vehicles. And there's already a terms constituent contented connected the request broadside with Rivian's trucks, fixed that they reside astatine the precocious extremity of the market.