Rivian has emerged as a stock to watch in the mid-term, driven by both opportunities and challenges. Despite facing supply chain disruptions and production pauses, especially with its Amazon delivery vans, Rivian remains a key player in the electric vehicle (EV) market. The company recently halted Amazon van production due to parts shortages, though it expects to recover the lost production soon. Amazon, which holds a 16% stake in Rivian, has placed an order for 100,000 electric delivery vans to reduce its carbon emissions. This partnership remains central to Rivian’s commercial vehicle strategy, even as the company also focuses on consumer models like the R1S and R1T.
Financially, Rivian has faced widening losses in 2024 but expects to improve through cost-cutting measures and production efficiency. The company’s strategic moves, including a $5 billion joint venture with Volkswagen to develop next-gen vehicle software, are poised to enhance its technological edge. Rivian’s focus on reducing material and production costs, particularly with its R1 platform, could help it achieve profitability by the end of 2024.
Tesla, Rivian’s main competitor, continues to dominate the EV space with its vast production scale and profitability, but Rivian has carved out a niche with its focus on adventure-oriented electric trucks and SUVs. While Tesla benefits from strong demand for its mass-market models like the Model 3 and Model Y, Rivian is appealing to a different market segment that values ruggedness and luxury.
Overall, Rivian’s stock could be a solid mid-term play if the company can overcome supply chain issues and demonstrate strong Q3 results, which could restore investor confidence. Additionally, Amazon’s stake continues to provide Rivian with a significant commercial advantage, despite production hiccups.