The Biden administration’s EV initiatives have boosted domestic production, positioning EV stocks for growth under a potential Harris presidency. Rivian (NASDAQ:RIVN) could lead this growth, giving Rivian Stock a better profile. Automakers may benefit further if Pete Buttigieg, an EV advocate as Secretary of Transportation, joins Harris as her running mate, likely prioritizing supportive policies for U.S.-based EV producers.
A notable Tesla (NASDAQ:TSLA) competitor, Rivian faces significant challenges on the other end of the political spectrum, making this stock a difficult one to digest with the upcoming election. Former President Donald Trump’s opposition to EVs and potential tax credit cuts pose a challenge to the struggling EV company.
Accordingly, with so much uncertainty (and volatility) around RIVN stock, let’s dive into whether this EV player is worth considering right now.
Volkswagen and Rivian Stock
Rivian and Volkswagen (OTCMKTS:VWAGY) explored a joint venture in the global EV market. In late June, Volkswagen pledged up to $5 billion, with $1 billion already invested, enhancing Rivian’s financial stability as it aimed for profitability.
Volkswagen, struggling with global EV production, gained access to Rivian’s technology and expertise. CEO Oliver Blume highlighted the partnership’s potential to enhance technology and reduce costs, marking significant benefits for both companies.
Rivian and Volkswagen will form an equally-owned joint venture to advance software development, leveraging Rivian’s existing tech.
Launching in late 2024, the venture aims to cut production costs and support vehicle launches from 2025 to 2030. Rivian, which lost $38,784 per truck earlier this year, will license its intellectual property to the new venture.
Rivian plans to use the $1 billion to fund the production of its new R2 compact SUV at its Normal, Illinois, factory. This follows $827 million in Illinois incentives for factory expansion.
Production of the R2 is set to begin in 2026, while Rivian also aims to launch a mid-size platform in Georgia. The partnership was seen as a major boost for Rivian’s future and alleviated investor concerns, according to Canaccord Genuity analyst George Gianarikas.
Chief Commercial Officer Steps Down
Rivian also recently promoted Dagan Mishoulam to SVP of Commercial, taking over many of the former executive’s duties, who will assist in the transition through February 2025. He praised Rivian’s VW partnership and expressed readiness for new challenges.
Rivian has seen several executive shifts recently. The company appointed Jennifer Prenner, a former Meta and Amazon executive, to lead marketing.
Javier Varela, previously COO at Volvo Cars, joined as COO, replacing Frank Klein. Additionally, Rivian’s Chief Accounting Officer, Jeffrey Baker, resigned to pursue other opportunities, with CFO Claire McDonough serving as interim accounting officer during the search for a replacement.
R2 Preorders Are Flooding In
Rivian expects to start R2 SUV deliveries in early 2026, with over 100,000 preorders already placed, according to VP Tim Fallon. This number has risen significantly from 68,000 shortly after the vehicle’s unveiling.
Priced at $45,000, the R2 requires a $100 deposit for U.S. reservations and will feature the North American Charging Standard for Tesla Supercharger access.
Rivian’s R2, a smaller and more affordable SUV, starts below the R1S and R1T. Production at its Normal Illinois plant has risen 30% as the company prepares for the R2’s launch. Rivian’s Q2 saw 13,790 deliveries, maintaining a 2024 target of 57,000 vehicles, with modest revenue growth anticipated.
RIVN is Promising, But Be Careful
Analysts are optimistic about Rivian stock. The company’s R2 model and partnership with Volkswagen have bolstered its market position and growth prospects.
Rivian plans to expand into new markets while focusing on innovative EVs. This makes the RIVN a good stock to own in the long-run.
That said, it’s also true that the EV sector is one that’s been hit with a myriad headwinds of late.
In my view, Rivian’s loss-producing business model may remain unattractive to many investors. So, until the company shows a pathway to profitability, this is a stock that could be difficult for some investors to justify investing capital in, at least for now.
Personally, I’m on the sidelines with respect to Rivian stock until I see such a pathway to profitability emerge.
On the date of publication, Chris MacDonald did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article.
