Should you buy Rivian stock while it's still below $15?
Show Caption
Hide Caption
Experiencing a Rivian electric joyride at SXSW 2025
Check out Rivian offering an off-roading experience in downtown Austin, Texas.
Fox - 7 Austin
Few companies have survived the boom and bust of the electric vehicle sector in the last five years. Rivian Automotive (NASDAQ: RIVN) is one that is still kicking. Along with Tesla, it is one of the only pure-play electric vehicle (EV) companies left producing cars for customers as competition intensifies and industry growth subsides.
The company is still in the very early stages, but has big plans for its product pipeline and investments in the coming years. As of this writing, the stock trades below $15, which is down over 90% from all-time highs set back at its initial public offering. At such a discounted price, is now the time to invest in EV disrupter Rivian Automotive? Let's dig into its Q1 earnings and investigate further.
Lowered deliveries guidance
With demand for EVs slowing to a crawl in 2025, Rivian's deliveries to customers have hit a wall. Its R1 truck costs $70,000-$100,000 for individuals to purchase, making it too expensive for most shoppers in the United States. Deliveries were just 8,640 last quarter, which is a fraction of the deliveries for industry leaders such as Tesla. This figure is moving in the wrong direction, with deliveries of over 13,000 in the first quarter a year ago.
However, Rivian is making progress to improve its unit economics and free-cash burn. Its gross margin hit a positive 17% in Q1, a record for the company. This came because of increasing revenue from software and services to $318 million compared to $88 million a year ago, along with payments from its joint venture with Volkswagen. Free cash flow over the last 12 months was negative $1.8 billion, an improvement from a few years ago.
With $7 billion in cash on the balance sheet and billions of dollars in promised funding from partners like Volkswagen along with the United States government, Rivian Automotive has plenty of years left to try to get to positive free cash flow. In order to do so, it will need to start growing its deliveries again to get to scale. How does it plan to do that? With a cheaper EV model.
Upcoming R2 vehicle
The R2 is an SUV that Rivian is planning to release in 2026, with factory production getting built right now. It will cost around $45,000-$50,000, significantly decreasing the price point compared to the R1. This should open up the market for more people in the United States to try a Rivian vehicle.
Even though Rivian is a niche player in the space, it already has the best-selling premium SUV costing over $70,000 in California, one of the largest markets for EVs. The brand is strong and customers are happy with its product quality. If it can get to scale, reduce prices, and still keep this premium brand for customers, Rivian could see an acceleration in demand for its vehicles in 2026 and beyond. It will need to do so in order to reach positive cash flow.
Should you buy Rivian stock?
Rivian is generating exactly $5 billion in annual revenue right now. If it can scale up production with the cheaper R2 and get deliveries moving in the right direction, there is plenty of opportunity to grow this revenue figure to $10 billion, $20 billion, and possibly even higher throughout the rest of the decade. There are over a million EVs sold in the United States every year, a number that should grow over the long term.
Having $20 billion in revenue with increasing gross margins could help Rivian turn around its financials. At a market capitalization of $16 billion right now, even just $1 billion in positive free-cash-flow generation at some point in the near future could help turn the corner for Rivian stock.
The problem is, the company has a lot of work ahead to make this happen. It has not shown yet that it can get deliveries moving in the right direction and is making a huge bet on the R2 product. Competition is coming from legacy automotive players that keep gaining share in the United States. It will need to grow deliveries by a significant amount in order to reach large enough scale to flip to positive free cash flow. Gross margins in the automotive business are slim, and you need to get enough unit volumes in order to cover your overhead costs.
When taking all of this into consideration, it is hard to argue why someone should own Rivian stock right now. There is a lot of potential with this brand, but it has not proven it can generate positive free cash flow or has a clear path to growing deliveries. For now, stay away from Rivian stock even at its cheap-looking price today.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
Should you invest $1,000 in Rivian Automotive right now?
Offer from the Motley Fool: Before you buy stock in Rivian Automotive, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $614,911!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $714,958!*
Now, it's worth notingStock Advisor's total average return is907% — a market-crushing outperformance compared to163%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor.
See the 10 stocks »
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
an hour ago
- The Hill
Asian shares rise after Wall Street falls as Trump pressures trading partners with new tariffs
Asian shares rose Tuesday after stocks on Wall Street closed broadly lower as the White House stepped up pressure on major trading partners to make deals before punishing tariffs imposed by the U.S. take effect. Japan's Nikkei 225 added 0.4% to 39,734.62 while South Korea's Kospi rose 1.2% to 3,096.29. Hong Kong's Hang Seng index climbed 0.2% to 23,941.58 while the Shanghai Composite gained 0.6% to 3,492.41. Australia's S&P/ASX 200 edged 0.1% lower to 8,583.50. On Wall Street on Monday, the S&P 500 fell 0.8% for its biggest loss since mid-June. The benchmark index remains near its all-time high set last week. The Dow Jones Industrial Average gave back 0.9% while the Nasdaq composite also finished 0.9% lower, not too far from its own record high. The losses were widespread. Decliners outnumbered gainers by nearly 4-to-1 on the New York Stock Exchange. Tesla tumbled 6.8% for the biggest drop among S&P 500 stocks as the feud between CEO Elon Musk and U.S. President Donald Trump reignited over the weekend. Musk, once a top donor and ally of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week. The selling accelerated after the Trump administration released letters informing Japan and South Korea that their goods will be taxed at 25% starting on Aug. 1, citing persistent trade imbalances with the two crucial U.S. allies in Asia. Trump also announced new tariff rates on Malaysia, Kazakhstan, South Africa, Laos and Myanmar. Just before hefty U.S. tariffs on goods imported from nearly every country around the globe were to take effect in April, Trump postponed the levies for 90 days in hopes that foreign governments would be more willing to strike new trade deals. That 90-day negotiating period was set to expire before Wednesday. This latest phase in the trade war heightens the threat of potentially more severe tariffs hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks. 'With the August 1 deadline serving as a negotiation buffer, the current tape suggests that markets are hedging, not fleeing. The mood? Edgy but not panicked—a poker table where the joker just hit the felt, but no one's shoved their stack,' Stephen Innes, managing partner at SPI Asset Management, wrote in a commentary. Mizuho Bank Ltd, in a commentary, said the three-week extension in the tariff deadline 'is a distraction from festering, and possibly widening, tariff risks.' In other dealings on Tuesday, benchmark U.S. crude oil lost 30 cents to $67.63 per barrel. Brent crude, the international standard, gave up 30 cents to $69.28. The dollar was trading at 146.05 to the Japanese yen, slightly up from 146.01 yen. The euro rose to $1.1746 from $1.1714. ___ AP Business Writer Alex Veiga contributed
Yahoo
an hour ago
- Yahoo
Asian shares rise after Wall Street falls as Trump pressures trading partners with new tariffs
Asian shares rose Tuesday after stocks on Wall Street closed broadly lower as the White House stepped up pressure on major trading partners to make deals before punishing tariffs imposed by the U.S. take effect. Japan's Nikkei 225 added 0.4% to 39,734.62 while South Korea's Kospi rose 1.2% to 3,096.29. Hong Kong's Hang Seng index climbed 0.2% to 23,941.58 while the Shanghai Composite gained 0.6% to 3,492.41. Australia's S&P/ASX 200 edged 0.1% lower to 8,583.50. On Wall Street on Monday, the S&P 500 fell 0.8% for its biggest loss since mid-June. The benchmark index remains near its all-time high set last week. The Dow Jones Industrial Average gave back 0.9% while the Nasdaq composite also finished 0.9% lower, not too far from its own record high. The losses were widespread. Decliners outnumbered gainers by nearly 4-to-1 on the New York Stock Exchange. Tesla tumbled 6.8% for the biggest drop among S&P 500 stocks as the feud between CEO Elon Musk and U.S. President Donald Trump reignited over the weekend. Musk, once a top donor and ally of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week. The selling accelerated after the Trump administration released letters informing Japan and South Korea that their goods will be taxed at 25% starting on Aug. 1, citing persistent trade imbalances with the two crucial U.S. allies in Asia. Trump also announced new tariff rates on Malaysia, Kazakhstan, South Africa, Laos and Myanmar. Just before hefty U.S. tariffs on goods imported from nearly every country around the globe were to take effect in April, Trump postponed the levies for 90 days in hopes that foreign governments would be more willing to strike new trade deals. That 90-day negotiating period was set to expire before Wednesday. This latest phase in the trade war heightens the threat of potentially more severe tariffs hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks. 'With the August 1 deadline serving as a negotiation buffer, the current tape suggests that markets are hedging, not fleeing. The mood? Edgy but not panicked—a poker table where the joker just hit the felt, but no one's shoved their stack,' Stephen Innes, managing partner at SPI Asset Management, wrote in a commentary. Mizuho Bank Ltd, in a commentary, said the three-week extension in the tariff deadline 'is a distraction from festering, and possibly widening, tariff risks.' In other dealings on Tuesday, benchmark U.S. crude oil lost 30 cents to $67.63 per barrel. Brent crude, the international standard, gave up 30 cents to $69.28. The dollar was trading at 146.05 to the Japanese yen, slightly up from 146.01 yen. The euro rose to $1.1746 from $1.1714. ___ AP Business Writer Alex Veiga contributed
Yahoo
an hour ago
- Yahoo
Asian shares rise after Wall Street falls as Trump pressures trading partners with new tariffs
Asian shares rose Tuesday after stocks on Wall Street closed broadly lower as the White House stepped up pressure on major trading partners to make deals before punishing tariffs imposed by the U.S. take effect. Japan's Nikkei 225 added 0.4% to 39,734.62 while South Korea's Kospi rose 1.2% to 3,096.29. Hong Kong's Hang Seng index climbed 0.2% to 23,941.58 while the Shanghai Composite gained 0.6% to 3,492.41. Australia's S&P/ASX 200 edged 0.1% lower to 8,583.50. On Wall Street on Monday, the S&P 500 fell 0.8% for its biggest loss since mid-June. The benchmark index remains near its all-time high set last week. The Dow Jones Industrial Average gave back 0.9% while the Nasdaq composite also finished 0.9% lower, not too far from its own record high. The losses were widespread. Decliners outnumbered gainers by nearly 4-to-1 on the New York Stock Exchange. Tesla tumbled 6.8% for the biggest drop among S&P 500 stocks as the feud between CEO Elon Musk and U.S. President Donald Trump reignited over the weekend. Musk, once a top donor and ally of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week. The selling accelerated after the Trump administration released letters informing Japan and South Korea that their goods will be taxed at 25% starting on Aug. 1, citing persistent trade imbalances with the two crucial U.S. allies in Asia. Trump also announced new tariff rates on Malaysia, Kazakhstan, South Africa, Laos and Myanmar. Just before hefty U.S. tariffs on goods imported from nearly every country around the globe were to take effect in April, Trump postponed the levies for 90 days in hopes that foreign governments would be more willing to strike new trade deals. That 90-day negotiating period was set to expire before Wednesday. This latest phase in the trade war heightens the threat of potentially more severe tariffs hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks. 'With the August 1 deadline serving as a negotiation buffer, the current tape suggests that markets are hedging, not fleeing. The mood? Edgy but not panicked—a poker table where the joker just hit the felt, but no one's shoved their stack,' Stephen Innes, managing partner at SPI Asset Management, wrote in a commentary. Mizuho Bank Ltd, in a commentary, said the three-week extension in the tariff deadline 'is a distraction from festering, and possibly widening, tariff risks.' In other dealings on Tuesday, benchmark U.S. crude oil lost 30 cents to $67.63 per barrel. Brent crude, the international standard, gave up 30 cents to $69.28. The dollar was trading at 146.05 to the Japanese yen, slightly up from 146.01 yen. The euro rose to $1.1746 from $1.1714. ___ AP Business Writer Alex Veiga contributed Teresa Cerojano, The Associated Press Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
