Rivian (NASDAQ:RIVN) has lost 54% of its value in 2024. There are it can’t survive. Rivian stock is now worth just a little over twice its 2023 sales, or $10.7 billion. That’s still better than Ford Motor (NYSE:F) or General Motors (NYSE:GM), now trading at less than one-third their annual sales. Ford and GM are also profitable.
Rivian is not. Far from it. Rivian’s net loss for the first quarter, $1.45 billion, was less than its . Updates are expected at a
Where’s the Hope?
There are a few reasons for hope.
One lies in the cars themselves. The R1 SUV and truck are much better than their Tesla (NASDAQ:TSLA) . A recent update gives the truck a range of 380 miles, 410 if you use the “Conserve Mode.”
The R1T also looks better than the Tesla Cybertruck. It looks like a truck. Car and Driver recently called the R1T It goes from zero to 60 in under 3 seconds and can get 80% of its charge back in a little over a half-hour.
The price is the problem. It starts at and goes up from there. It should be noted that the latest Ford F-150 costs about . The electric “Lightning” version of that truck
But is the R1T worth $30,000 more than a new Kia EV9? .
Rivian does have It has moved production of its R2 line back to Illinois to conserve cash. The company produced 50,000 cars last year.
It claims it will have “positive gross profit” this year on the same production schedule. To make that happen it’s steadily of salaried employees.
Rivian Risks
Despite good execution, especially compared with rivals like Lucid Motors (NASDAQ:LCID), or the late Fisker Motors, the risks of failure for Rivian remain high.
Rivian ended the first quarter with just . Even with a slower burn rate it will need more cash in 2025.
That may be hard to come by. Rivian already has $4.4 billion in debt, and the cost of debt today is high. Selling stock waters down existing shareholders.
It could ask for help from Amazon.Com (NASDAQ:AMZN), still taking delivery of 100,000 delivery vans ordered in the last decade. It could seek more help from Georgia Gov. Brian Kemp, who has on the company.
But CEO R.J. Scaringe is . Speculators at Stocktwits have turned neutral, and message volume is Analysts who once loved Rivian have run for cover. are now in the neutral or sell camp. The plaintiffs’ bar now complains investors .
The Bottom Line on Rivian Stock
Our Muslim Farooque still believes in Rivian. He cites “solid progress in ramping up delivery volumes and moving toward profitability.”
While EV growth has , it hasn’t stopped. It’s up , despite U.S. sales falling in the first quarter.
Much of the fall in U.S. EV sales came from Tesla. Reviews on the Tesla Cybertruck I saw one in Atlanta recently and wouldn’t take one if you handed me the keys.
Tesla’s problems help Rivian, but only in theory. you’ll be impressed, but you may want to do some hard bargaining.
That’s the Rivian risk, right there. Nobody loves you when you’re down and out. If you’re betting on Rivian you’re betting a long shot.
But if it comes good in two years, if the Georgia plant does get built, you’ll be a genius.
As of this writing, Dana Blankenhorn had a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
