American electric vehicle (EV) maker Rivian (NASDAQ:RIVN) raised its production target slightly while delivering quarterly results, but investors seem unimpressed.
Rivian lost $1.95 billion, $1.27 per share, on revenue of $1.12 billion for the three months ended June 30, ending the quarter with $9.26 billion in cash. The company produced 13,992 cars during the quarter and raised its full-year production target to 52,000.
The loss was smaller than expected, and revenue was higher, but the reaction was subdued. RIVN stock rose just 2.4% on Aug. 8 but lost 1.2% overnight to open at $24.65, a market capitalization of $23.3 billion.
Investors Want Profit
Analysts say Rivian has a “long path to profitability,” which is why the stock did not react to some lifting their price targets.
Investors were happy to see the company’s EV car designs in 2020 and EV production in 2022. But it’s clear that many investors now want to see EV profits. Rivian isn’t delivering them. Prices being paid for used Rivians are falling as consumers wrestle with trade-offs between battery weight, car weight, and how far cars go between charges.
Even in China, the most sophisticated EV market, big EVs are struggling. The most popular high-end SUV is the Li Auto (NASDAQ:LI) L9, a hybrid. Pure electrics like those from BYD (OTCMKTS:BYDDF) do sell well in the mid-market because those cars are lighter, less expensive, and have a longer range. The only mid-market EV being made in the U.S. is the Chevy Bolt from General Motors (NYSE:GM).
Rivian is still building cars in Illinois but has begun work on a Georgia factory that will open in 2026 with extensive state government aid. The company also has a huge order from Amazon (NASDAQ:AMZN) for delivery vans it has just begun to fill.
RIVN Stock: What Happens Next
For RIVN stock to move much higher, the company must show a move toward profit. A narrower loss, even a narrower-than-expected loss, is still a loss.
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.
