Electric vehicle manufacturer Rivian (NASDAQ:RIVN) is among the companies set to change the world. Like many other EV makers, Rivian’s stock has been on a wild ride in recent years.
With RIVN stock making a comeback this year, there are plenty asking whether Rivian is a solid investment right now.
Personally, I think Rivian can have its place in a well-diversified portfolio. The company’s improving financials and plans for production expansion make it an intriguing option today.
Rivian ranked eighth in U.S. EV registrations, capturing 2.8% of the market from January to July, per Experian data. In July, they saw 2,750 registrations, a modest uptick from the 2,596 monthly average in H1.
Despite critics, a central bank is investing heavily in RIVN stock, and the U.S. EV battery industry is booming. Let’s explore reasons to invest in Rivian.
Recent RIVN News
Rivian registered 18,359 new vehicles from January to July, mainly R1S and R1T models. It’s shifting focus to produce more R1S units, aiming for 52,000 total units this year. CEO RJ Scaringe believes they’ve made significant progress.
Rivian’s profit per vehicle is rising thanks to better facility use. However, Ford’s (NYSE:F) F-150 Lightning outsold the R1T, partly due to price cuts.
Ford’s cheapest F-150 Lightning Pro now begins at $51,990 with 240 miles of range, while the Rivian R1T starts at $74,800 with around 270 miles of range.
The Leading EV Startup
Despite its growth in US EV sales, startup competitors Lucid (NASDAQ:LCID), VinFast (NASDAQ:VFS), and Fisker (NYSE:FSR) face market challenges. Lucid had 348 registrations for its luxury Air EV in July, with prices lowered by up to $12,400.
Production dipped after a peak in Q4 2022, with 4,487 EVs produced in H1 2023. Lucid ranks 18th in July’s EV sales, trailing Porsche’s Taycan.
Analysts attribute Lucid’s challenges to fierce competition with Tesla (NASDAQ:TSLA), which has consistently reduced prices.
VinFast, a new player, registered 19 VF 8 electric SUVs in July, totaling 170 in seven months. After a strong Nasdaq debut, VinFast’s value declined over 80% in the past month.
Fisker’s Ocean recorded 30 registrations in July, totaling 37 for the year. As a recent entrant, Fisker ranked last among 26 brands in July. Wedbush analyst Dan Ives views Fisker as a significant EV player for the next decade with strong demand and improved visibility into 2024.
These data suggest Rivian is among the leading EV startups long-term investors ought to consider right now.
Reasons to Buy RIVN Stock
Rivian’s CFO, Claire McDonough, expects a favorable trend ahead. She expects Rivian will profit from declining battery material prices later this year and in 2024.
The increase in prices for materials like lithium and copper, driven by pandemic and geopolitical events, could reverse as supply chains stabilize.
McDonough suggests lower battery metal costs might help Rivian’s margins, but it’s one of several long-term factors. The company’s Georgia plant’s expected production in 2026 emphasizes the need for patience.
Rivian’s gross profit per vehicle increased by $35,000 due to enhanced efficiency at its Illinois factory. They planned exciting updates for early 2024, introducing new features and cost-saving initiatives for the upcoming R2 series.
Scaringe sees an advantage in vertical integration, particularly in software and tech, allowing for a smoother rollout of features like recent OTA updates improving ride quality in R1S and R1T.
What Now
Rivian Automotive is worth a look right now, for many reasons. The company’s backers, including the Swiss central bank, highlights the company’s potential upside over the long-term.
Factoring in expectations of falling battery metal prices, and the company’s potential for future profitability, one gets a positive outlook for this stock over the long-haul.
While challenges may arise, long-term growth for Rivian is anticipated, making its current low stock price an attractive opportunity.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
