Stocks are broadly seeing strength today, as weaker-than-expected jobs data fuels expectations that interest rates may not rise as fast as previously thought. These drivers have led the tech-heavy Nasdaq, which includes many popular electric vehicle (EV) companies such as Rivian (NASDAQ:RIVN), to lead the way in terms of gains. Today, RIVN stock has surged more than 1% higher in early afternoon trading, in line with its broader index.
That said, there’s one company-specific catalyst that may be getting lost in the fray today. Rivian announced yesterday that it has hired an industry veteran as the first-ever plant manager for its upcoming Georgia manufacturing facility. Let’s dive into why this is a big deal, and why investors may want to hone in on Rivian right now.
RIVN Stock Moves Higher on a Number of Factors
Rivian’s Georgia manufacturing plant will be the company’s second such facility, home to the R2 lineup of vehicles, which are expected to be priced much more attractively than the company’s first-generation lineup. This plant is expected to be under construction in early 2024. The R2 lineup will likely be revealed next year.
The fact that Rivian has picked Arnhelm Mittelbach to manage this plant is notable, given his expertise with rival Mercedes-Benz (OTCMKTS:MBGYY). Indeed, Mittelbach has more than two decades of experience at the luxury carmaker.
For investors bullish on Rivian’s upcoming rollout, execution will be among the most important factors to consider. Not only will the R2 lineup and pricing need to meet investor expectations but also the company will need to ensure it’s able to hit its production milestones. That’s where a man like Mittelbach comes into the equation.
I think companies like Rivian require investors to take a longer-term perspective, factoring in layers upon layers of growth over time. This plant will allow for annual capacity of around 400,000 vehicles per year when the facility is fully built out. To start, it will support production of about 200,000 vehicles per year. However, for those building out their valuation models, timing will be important. Thus, the fact that Rivian is getting its ducks in a row is encouraging, at least for now.
Moving forward, investors will want to monitor the progress of this plant and the company’s execution of its R2 lineup.
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.
