RIVN Stock Alert: Rivian CEO RJ Scaringe to Directly Oversee Product Development


  • Rivian (RIVN) said founder RJ Scaringe is now directly in charge of its product development.
  • Former Tesla vice president Nick Kalayjain is staying on through 2024.
  • The company hopes its coming R2 line will let it show a profit in 2026.
RIVN stock - RIVN Stock Alert: Rivian CEO RJ Scaringe to Directly Oversee Product Development

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Electric vehicle (EV) maker Rivian (NASDAQ:RIVN) announced that founder RJ Scaringe is now directly managing its product development team as it prepares to launch its new R2 vehicle line.

He replaces Nick Kalayjain, a former vice president for engineering at rival Tesla (NASDAQ:TSLA). Kalayjain has agreed to stay at Rivian through 2024 in a different role.

Rivian stock is expected to open on Nov. 21 at $16.90 per share, representing a market capitalization of $16.2 billion.

RIVN Stock: Gearing Up For the R2 Detour

Rivian stock is down 8% in 2023 while that of Tesla is up 90%.

But recent negative headlines about Tesla CEO Elon Musk have some taking a second look at Rivian. At Tipranks, 12 of 20 analysts still rate Rivian a buy, with just one telling clients to “sell.”

Rivian is losing $30,000 for every car it makes. But analysts assume the R2 design, and a new production plant it’s building in Georgia with state help, will let it earn a profit in 2026. Rivian is targeting a base price of $40,000, for both the R2 pickup truck and SUV.

Rivian ended September with $13.8 billion in cash and expects to make 54,000 vehicles this year at a plant in Normal, Illinois. The company lost $1.44 billion, or $1.57 per share, on revenue of $526 million during the third quarter. Analysts called that “better than expected.”

Rivian got early backing from Amazon (NASDAQ:AMZN), including an order for 100,000 electric vans. About 10,000 of those vans are now operating. Amazon recently dropped its exclusivity agreement on the design.

What Happens Next?

I am not as bullish about Rivian as other analysts. That’s because a $40,000 EV in 2026 may still have trouble competing in what will be a very crowded market.

Until it can scale production of the R2 the most important number for Rivian is its cash balance. To keep that balance high, it announced another $1.5 billion cash raise, in the form of convertible notes, in October.

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.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

Article printed from InvestorPlace Media, https://investorplace.com/2023/11/rivn-stock-alert-rivian-ceo-rj-scaringe-to-directly-oversee-product-development/.

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