Three Reasons Rivian May Be Worth Another Look for Investors
Shares of Rivian Automotive (NASDAQ: RIVN) have plummeted 90% from their peak value and have declined approximately 30% in 2025 alone. Despite these staggering figures, there are still positive aspects to consider regarding this electric vehicle (EV) company. While Rivian is certainly a Stock that appeals primarily to more aggressive investors, here are three compelling reasons that may encourage some investors to consider buying it now.
1. Current Investor Sentiment is Extremely Negative
Unquestionably, the decline in the Stock price reflects a significant shift in investor perception. Initially, during its public debut, Rivian enjoyed widespread enthusiasm surrounding electric vehicles. However, as the market cooled on EV stocks, Rivian has faced a dramatic decline in its stock value.
Although the bearish sentiment appears to stem from the market’s overall attitude rather than Rivian’s intrinsic business performance, it illustrates the cyclical nature of investor behavior. Many investors are hesitant to engage with EV stocks now, leading to Rivian’s steep fall from favor.
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Image source: Rivian.
Despite these market challenges, Rivian is actively working to expand its business. The company has been consistently hitting significant milestones and still boasts approximately $7.5 billion in cash and short-term investments. Additionally, Rivian has secured further commitments from key partners, which will aid in its ongoing efforts.
Though ambitious in its pursuit to manufacture an EV truck from the ground up, Rivian has made substantial progress and seems well-positioned to sustain its advancement in the future.
2. Rivian is Achieving Production Scale
Reaching production at scale is a crucial milestone for Rivian. While it currently produces around 50,000 vehicles annually—a figure that does not yet rival the output of Tesla (NASDAQ: TSLA) or traditional automakers—it still operates a large factory at high efficiency. This level of production is a significant achievement when compared to many EV startups that never managed to reach this point.
Importantly, Rivian is not resting on its laurels. The company aims to upgrade its production line in 2024 to enhance profitability, ultimately reducing losses. Notably, Rivian succeeded in slashing its net loss by 50% in the fourth quarter of 2024, compared to the same quarter in 2023.
3. Achieving Gross Profit: A Key Milestone
The most significant reason for Rivian’s year-over-year improvement in the fourth quarter of 2024 is its achievement of a modest gross profit. This indicates that Rivian’s sales revenue exceeded the costs of producing its vehicles. While these profits did not cover all expenses like selling, general and administrative (SG&A) costs and research and development (R&D), it marks an important step toward eventual profitability.
The main target for 2025 is to generate a gross profit for the entire year. It’s important to note that with another factory shutdown planned for upgrades, Rivian might experience fluctuations in gross profit during the year. For instance, the company produced extra vehicles in the first quarter to ensure sales continuity during the shutdown. If Rivian can meet its gross profit objectives for 2025, it would demonstrate continued progress toward building a sustainable and profitable business.
Rivian’s Incremental Progress Toward Success
Building a car manufacturing company from scratch takes time, and that’s exactly what Rivian is experiencing. This may not happen quickly enough for some investors or analysts, but it’s important to recognize the pivotal progress being made. While Rivian still faces challenges on its path to sustained profitability, it belongs in the portfolio of more aggressive investors. For those willing to take the risk, buying Rivian’s stock during this downturn could present a chance to capitalize on future growth, assuming they meet their outlined goals.
Should You Invest $1,000 in Rivian Automotive Right Now?
Before taking the plunge into Stock in Rivian Automotive, it’s essential to consider the following:
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Reuben Gregg Brewer has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
