Key Points

• Rivian manages its key components in-house, including a proprietary technology platform for vehicle controls and autonomous driving features.

• It leveraged its technology to form a joint venture with Volkswagen, accelerating the development of next-generation electric vehicles.

• Rivian is scheduled to begin construction of a new EV manufacturing facility in Georgia in 2026.

• 10 stocks we like better than Rivian Automotive ›

Rivian Automotive (NASDAQ: RIVN) has captured some investor attention in its quest to establish its place in the electric vehicle (EV) market. Following a meteoric rise after its initial public offering in late 2021, Rivian's stock plummeted in the two years that followed. The stock is still down 92% from its peak.

However, recent developments, including its announcement of a joint venture with Volkswagen (OTC: VWAP.Y) and consecutive quarters of positive gross profits, show that Rivian may be turning a corner. Still, challenges remain as the company prepares to expand its manufacturing capacity and scale up production over the next several years. If you're thinking of investing in Rivian, here's what you need to know.

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Rivian's in-house focus and technology platform

Rivian manages nearly all aspects of its business, from engineering to manufacturing, in-house. The company has developed a technology platform that encompasses a comprehensive software stack, covering everything from vehicle controls to the user interface, and enabling over-the-air updates and feature enhancements. Additionally, it features an in-house built autonomy platform with driver-assist technology that can be utilized for autonomous driving.

The company leveraged this technology to establish a joint venture with the Volkswagen Group that focuses on software, electronic control units (ECUs), and related network architecture design and development.

Volkswagen plans to utilize Rivian's zonal ECU architecture and software stack across its multiple brands. In November, Rivian received $1.3 billion for intellectual property licensed to Volkswagen. Volkswagen has also committed to making additional equity investments of up to approximately $2.5 billion in multiple tranches.

Amazon is a major customer and investor

One key aspect of Rivian's business since 2019 has been its partnership with Amazon (NASDAQ: AMZN) to develop the Rivian Commercial Van and Electric Delivery Van variants. Today, there are more than 20,000 of these vehicles on the road. In November 2023, their agreement was amended to adjust specific exclusivity rights for Amazon, allowing Rivian to sell its commercial vans to other customers.

Image source: Rivian.

The Amazon contract has been a major portion of Rivian's business. In 2024, Rivian generated over $1.04 billion in revenue from Amazon -- 21% of its total revenue. In 2025's first quarter, revenue from Amazon totaled $99 million, a significant decrease from the $338 million reported in the same quarter last year.

Amazon also holds a significant stake in Rivian, representing 13.3% of its voting power. This partnership with one of the world's largest retailers has been instrumental in helping Rivian establish its foothold in the competitive automotive industry. Still, it will be crucial for the EV maker to develop its other partnerships and revenue streams.

What's next for Rivian?

Rivian has a history of incurring significant net losses, including a net loss of $4.8 billion last year and a $541 million loss in 2025's first quarter.

However, the company did achieve a gross profit of $206 million in Q1, its highest gross profit to date. It was also the company's second consecutive quarter of gross profitability. Management expects to achieve a positive gross profit for 2025 as it continues to focus on cost efficiencies.

RIVN Revenue (Quarterly) data by YCharts.

The EV maker will continue to ramp up production and add to its facilities. It plans to build a second manufacturing facility near Social Circle, Georgia, to meet demand from the United States and international markets. The plant is expected to have an annual capacity of 400,000 vehicles. It will be built in two phases, each contributing 200,000 units of annual capacity.

Construction of that Georgia facility is expected to begin in 2026, with production on the first manufacturing line projected to start in 2028. Vehicles produced there will be on the company's midsize platform, which includes its R2 and R3 models. Development of this facility is supported by a loan arrangement with the U.S. Department of Energy for up to approximately $6.6 billion.

Is Rivian right for you?

Rivian is expanding its manufacturing footprint, strategically developing its software and services ecosystem, and forming strategic partnerships with key customers and partners. The company is making solid progress in revenue and gross profit, and I would like to see it continue to improve its cost efficiency and profitability.

Investors buying today could be getting on the ground floor. That said, analysts project that the EV maker will continue to lose money through 2028, as it will take time and capital to build out its facilities and scale up production. For these reasons, Rivian is a high-risk, high-potential-reward stock that may take years to pay off, making it best suited for aggressive investors with long-term buy-and-hold timelines.

Should you invest $1,000 in Rivian Automotive right now?

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Key Points

• Electric car stocks have surged due to robotaxi optimism.

• But severe near-term challenges remain.

• 10 stocks we like better than Lucid Group ›

Several electric car stocks got huge boosts in recent weeks over enthusiasm for the promise of robotaxis. Tesla launched its robotaxi pilot program in Austin, Texas, last month. Lucid Group (NASDAQ: LCID), meanwhile, recently partnered with Uber Technologies to deliver 20,000 self-driving vehicles alongside a $300 million cash infusion.

But not every analyst is bullish. CNBC's Jim Cramer, for example, recently questioned the value of Lucid's deal with Uber. This month, seven other major Wall Street analysts reaffirmed their price targets for Lucid stock. Everyone predicts that shares will fall in value over the next 12 months.

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Why is Wall Street still so bearish? There's one obvious culprit.

The near-term reality for EV stocks is frightening

Cathie Wood, CEO of Ark Invest, thinks robotaxis will be a $10 trillion industry long term. That has investors excited.

Over the next 12 to 24 months, however, most EV makers will be feeling the pain. That's because federal tax credits for EVs are set to expire this September, effectively making a new EV purchase $7,500 more expensive. While the exact impact remains unknown, this shift should sizably lower demand growth. Federal automotive regulatory credits, meanwhile, are also set to lose their value given fines for noncompliance are being eliminated. Lucid has earned more than $200 million through these programs. And while it won't lose access to the entirety of this profit source, given that many state and international programs will remain, the financial impact will be sudden and meaningful.

Image source: Getty Images.

Every EV maker will be affected by these regulatory shifts, including Rivian, Tesla, and Lucid. EV sales in the second quarter of 2025 are already down 6.3% year over year. We could see these declines persist, or even accelerate, given reduced incentives.

Lucid's robotaxi opportunity remains lucrative long term. But analysts are rightfully worried about the next year or two when it comes to reduced sales and profit growth.

Should you invest $1,000 in Lucid Group right now?

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Tesla (NASDAQ: TSLA) closed down 8.2% at $305.30 on Thursday, retreating sharply after CEO Elon Musk's cautionary earnings commentary about "rough quarters ahead" amid macroeconomic and electric vehicle (EV) demand uncertainties.

The decline stood in contrast to broader market performance, with the Nasdaq Composite gaining 0.18% and the S&P 500 advancing 0.07%, highlighting company-specific headwinds rather than sectorwide weakness. Electric vehicle peers also declined but to a lesser extent, with Rivian (NASDAQ: RIVN) falling 1.43% to $13.82 and Lucid Group (NASDAQ: LCID) dropping 2.92% to $2.99, suggesting broader risk sensitivity within the EV sector while confirming Tesla's movement was the most sentiment-driven.

Trading volume reached approximately 154 million shares, roughly 1.4 times the 200-day average of 109 million shares, indicating active institutional repositioning rather than passive selling. The elevated volume combined with the substantial price decline signals deliberate investor response to forward guidance concerns, highlighting near-term skepticism despite continued longer-term interest in electric vehicle growth prospects.

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Key Points

• The EV industry is struggling, and Trump administration policies could make things worse.

• The future of upstart EV maker Rivian will depend on its transition to lower-priced vehicles.

• 10 stocks we like better than Rivian Automotive ›

Rivian Automotive (NASDAQ: RIVN) was on top of the world when it went public in late 2021 at the height of electric vehicle (EV) industry optimism. With a market cap that exceeded $100 billion, the start-up was briefly America's second-most valuable automaker, ahead of Ford Motor Company and General Motors despite reporting almost no sales.

Naturally, the overvaluation didn't last. Now, Rivian's stock has fallen a whopping 93% from its all-time high, which is sure to catch the attention of value-conscious investors who are optimistic about the future of America's EV industry.

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Let's explore what the next three years may have in store for the company.

Trump's economic policy is a mixed bag

Like many companies, Rivian saw its stock price soar after Donald Trump's election victory in November 2024. But that optimism was premature. As a candidate, Trump made it clear that he planned to reduce support for green energy policies, and that's exactly what he has done in office.

The new administration has directed the Environmental Protection Agency (EPA) to terminate Biden's so-called "EV mandate," which aimed to make 56% of vehicles sold in the US electric by 2032. Furthermore, the One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, will roll back critical industry support, such as the $7,500 tax credit for new electric passenger vehicle sales.

According to CBS News, EVs typically cost around $9,000 more than equivalent gasoline-powered cars, and the tax credit helped them stay competitive for cost-conscious consumers. This change could undermine Rivian's planned pivot to lower-priced vehicle offerings like the new R2 platform, expected to start at $45,000 when it launches in 2026.

Image source: Getty Images.

That said, Trump's policy isn't all bad news for Rivian. The government's 25% tariff on imported vehicles could hurt the company's foreign rivals. Rivian manufactures all its cars at its 3.3 million-square-foot facility in Normal, Illinois, and possible expansion plans (for the new R2 line) could benefit from the OBBBA's incentives for domestic capital investment.

The rollback of EV industry support could also encourage Rivian's gasoline-powered rival to stick to traditional combustion engine technology longer, reducing the level of competition in the EV industry.

Can Rivian become profitable?

Rivian is in a tough spot right now, as highlighted by first-quarter earnings. Revenue grew by just 3% year over year to $1.24 billion, which isn't very encouraging for a growth stock trying to scale up its operations. Furthermore, the company generated an operating loss of $655 million.

However, there is a silver lining to the story. Rivian's losses have shrunk by almost half over the past 12 months despite the lackluster top-line growth. This trend indicates that management's dramatic cost-cutting efforts (in staffing, supply chain, and manufacturing processes) are yielding impressive results.

Furthermore, Rivian has secured $1 billion in much-needed financing from Volkswagen, and the two companies are working together on a joint venture to develop software, which could bring down costs through economies of scale.

At this point, more top-line growth may be the only thing Rivian needs to establish a pathway to profitability and become a successful company. And over the next few years, the rollout of new, lower-priced vehicles like the R2 and R3 could help make this a reality.

Is Rivian a buy?

Rivian's future almost entirely depends on the popularity of its new vehicle platforms, expected to launch next year. Unfortunately, it is way too early to draw conclusions because we still don't know how the removal of subsidies and other government policies will influence consumer demand for EVs. Investors may want to wait on the sidelines until more information becomes available.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

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Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool recommends General Motors and Volkswagen Ag. The Motley Fool has a disclosure policy.

Lucid Group (NASDAQ: LCID) shares skyrocketed 36.2% to close at $3.12 on Thursday, marking one of the electric vehicle (EV) maker's strongest single-day performances of the year. The dramatic surge was fueled by two significant announcements: a major partnership with Uber Technologies (NYSE: UBER) involving a $300 million commitment to deploy 20,000 Lucid Gravity SUVs as robotaxis starting in 2026, and the company's filing for a 1-for-10 reverse stock split aimed at boosting share price and attracting institutional investors.

The stock's performance vastly outpaced broader market indices, with the Nasdaq Composite rising just 0.74% and the S&P 500 gaining 0.54%. Among competitors, Tesla (NASDAQ: TSLA) dipped 0.7% to $319.41, while Rivian (NASDAQ: RIVN) posted a more modest gain of 4.1% to $12.90, highlighting the Lucid-specific nature of today's market reaction.

Trading volume reached an extraordinary 934.5 million shares, nearly seven times the 50-day average of roughly 137.7 million shares. This exceptional volume surge, combined with the stock's significant distance from its 52-week high ($4.43), reflects the market's strong response to Lucid's strategic initiatives. While the robotaxi partnership offers a potential new revenue stream, investors appear to be revaluing the company's prospects in the competitive electric vehicle landscape.

Should you invest $1,000 in Lucid Group right now?

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.

Key Points

• Rivian is set to lose automotive regulatory credits that it has been able to sell to other automakers.

• Shares remain cheap enough for long-term investment.

• 10 stocks we like better than Rivian Automotive ›

Rivian Automotive (NASDAQ: RIVN) has an exciting future. This year, the electric vehicle (EV) company achieved several consecutive quarters of positive gross margins. And early next year, management expects to begin production of three new vehicles, all priced under $50,000. That could attract tens of millions of new potential buyers to Rivian's lineup.

Despite the positives, there are some challenges ahead, including one that could eliminate a crucial $325 million profit source.

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A new budget bill could be costly for Rivian

For years, EV manufacturers have relied on government subsidies to increase demand for their products and help offset the steep cost of scaling up a capital-intensive business. These subsidies have generated billions of dollars in extra cash flow for EV producers over the decades. Several subsidies, however, are likely on their way out.

Following the recent signing into law of President Donald Trump's budget bill -- the so-called "Big Beautiful Bill" -- EV tax credits will be phased out by the end of 2025. Several EV stocks experienced analyst downgrades on the news.

Car buyers are increasingly cost conscious. Recent surveys suggest that more than 80% of them would cancel their orders if prices rose by 25%.

The elimination of federal tax credits, which can total up to $7,500 per buyer, will effectively make EVs more expensive -- a strong headwind. But there's another program that could be even more destructive to the financial viability of EV makers like Rivian.

In 2024, Rivian generated $325 million in revenue from the sale of automotive regulatory credits. State and federal governments were offering these credits as a way to spur production of low-emission vehicles.

EV makers like Rivian earn them for producing low-emission vehicles. They can then sell these credits to other automakers that fail to produce enough low-emission vehicles. Apart from a little overhead, the sale of these credits results in essentially a 100% profit margin.

In the fourth quarter of 2024 alone, Rivian sold roughly $300 million worth of regulatory credits. The company's total gross profit, meanwhile, was around $170 million. Without the sale of these credits, therefore, the company would have produced a sizable negative gross profit.

The new budget bill calls for the elimination of fines for noncompliant automakers. This essentially eliminates any incentive for these automakers to buy excess regulatory credits from their fellow automakers.

Will this result in a huge reduction in revenue and profit for Rivian? To answer that question, a few details need to be resolved.

Image source: Getty Images.

Is Rivian stock still a buy?

It's important to note that only federal regulatory credits will be affected. Credits earned under other government programs -- such as those in California or China -- won't be eliminated.

How much of Rivian's credit sales stem from federal programs? It's tough to tell, given that the company doesn't break down credit sales by source.

But analysts for Tesla believe around 75% of its credits are earned in the U.S., with maybe half coming from federal programs. These are very rough estimates, but using these figures, it's possible that Rivian would have generated around $120 million less in credit sales last year without federal programs -- or around $120 million less in profit.

Given that it produced around $170 million in gross profit last year, the elimination of federal regulatory credits would still have left it with around $50 million in gross profit -- not bad for a business needing to prove to investors that it can sell its vehicles at a profit.

Trading at just 2.8 times sales, expectations for Rivian are already low. And the elimination of federal regulatory credits won't sink the company on its own. But the company's growth timeline is now likely longer than previously expected.

The company will have less cash to invest and may need to shelve some growth initiatives to keep the launch of its mass market vehicles on schedule. Still, for patient investors willing to look far beyond current subsidy changes, Rivian remains a promising long-term growth stock.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

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*Stock Advisor returns as of July 7, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

New legislation in the United States would make it even less affordable to buy electric vehicles.

*Stock prices used were the afternoon prices of July 5, 2025. The video was published on July 7, 2025.

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Where to invest $1,000 right now

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Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool

Key Points

• Rivian's financials are about to improve dramatically.

• The EV maker is set to introduce a lower-priced model.

• But the stock price doesn't fully account for this potential.

• These 10 stocks could mint the next wave of millionaires ›

Rivian Automotive (NASDAQ: RIVN) is one of the most exciting electric car stocks today. Over the next few years, its growth should explode higher thanks to the introduction of new, lower-priced models. But if you think the market is already pricing in this growth, think again. Rivian stock is far cheaper than you might suspect.

Rivian's financials are about to improve greatly

Next year, everything will change for Rivian. That's because the company's new, lower priced R2 model is expected to begin production in early 2026. This will be Rivian's first vehicle priced under $50,000. Two additional vehicles under that price point -- the R3 and R3X -- are expected to launch soon after the R2 begins production.

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When Tesla launched its first affordable models -- the Model 3 and Model Y -- sales doubled, then tripled in the years that followed. Profits also improved dramatically due to greater economies of scale.

Image source: Getty Images.

As the charts below highlight, Rivian is now expected to surpass Tesla in near-term sales growth. Given several expected model introductions in 2026 and 2027, it's reasonable to expect Rivian to best Tesla's sales growth for several years to come.

Rivian's gross margins are also now on par with Tesla's, though its profit margins remain negative. But that could change in the next few years when the company starts scaling sales for its mass market vehicles.

RIVN PS Ratio data by YCharts

Despite its exciting future, Rivian stock remains priced at a steep discount to Tesla shares. On a price-to-sales basis, shares trade at a discount of roughly 75%. There is still a lot of execution risk ahead. Plus, Rivian's access to capital is significantly limited compared to Tesla's -- a huge disadvantage in a capital-intensive industry.

But with a $15 billion market capitalization, improving margins and sales growth, and a relatively cheap valuation, Rivian stock remains far from overpriced.

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There's a lot to love about Rivian Automotive (NASDAQ: RIVN) stock right now. Over the next 12 to 24 months, the company will experience several major growth catalysts. But as Warren Buffett often advises, keeping an eye on the long term is key to generating the biggest profits.

Where might Rivian end up 10 years from now? The answer might surprise you.

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Expect these 3 things to revolutionize the business

To understand where Rivian is headed over the next 10 years, we must first look at some near-term factors. That's because Rivian's near-term growth catalysts should help set the company up for the next decade of growth.

When it comes to electric vehicle (EV) stocks, one of the most exciting catalysts involves getting new models to market that the masses can afford. Roughly 70% of Americans want their next car to cost less than $50,000. Getting vehicles to market with starting prices under this threshold is critical to putting growth on overdrive.

But this is a challenge for most EV makers. On average, electric vehicles still cost more to build than conventional ones, and many EV start-ups lack the scale to sell vehicles at low prices. Plus, they often lack the capital runway to take a big financial hit by pricing vehicles that cost a lot to manufacture at a steep discount for consumers.

After years of investment, Rivian is finally poised to release its first "mass market" vehicles. The R2, R3, and R3X are all expected to debut with starting prices under $50,000. The first of these three should start production in early 2026, though I don't expect full production of all three to commence until 2027 at the earliest.

Still, these vehicles have the potential to revolutionize Rivian's business, changing it from a niche EV producer to a nationally recognized brand. Mass market vehicles like these can finally give Rivian the scale it needs to survive long term.

Right now, Tesla's two mass market vehicles -- the Model Y and Model 3 -- contribute more than 90% of its vehicle sales. They are critical for the company's profitability. Rivian's new models hold the same sales growth and profitability potential.

But beyond these three new vehicles, the future of Rivian isn't what you might expect. In fact, over the next 10 years, Rivian's most promising opportunity might not involve manufacturing vehicles at all.

Image source: Getty Images.

Rivian's future might not involve selling cars

Last year, Rivian and Volkswagen agreed to a $5.8 billion deal that would create a joint venture focused not on cars themselves, but on the knowledge and software involved in making them. "The partnership aims to strengthen areas of weakness in both companies, with Volkswagen looking for software expertise and Rivian in need of both manufacturing knowledge and an influx of cash," Car and Driver reported at the time.

The deal gave Rivian a lot of much-needed cash. But it was also a huge vote of confidence in the company's unique approach to software. Rivian's chief software officer, Wassym Bensaid, said that the software and approach to building the R2 -- Rivian's newest mass market model -- will provide "the platform that will underpin actually all future EV products at VW."

Rivian has been designing its own software stack for years. Its unique approach promises to be simpler, faster, and more efficient than existing architects'. As a pure EV maker, Rivian is far more focused on next-gen technology than legacy automakers like Volkswagen are. "What we realized over the last few years is the enormous difficulty for incumbent existing auto manufacturers to develop their own full stack software," Rivian's CEO stressed last summer. "The challenge for an incumbent existing [automaker] is if you built a deep dependency on suppliers for making all these ECUs to flip the switch to move off of that."

Rivian's software allows automakers to bring nearly the entire software stack in house, saving money and streamlining integration. This ability is so valuable that Volkswagen ultimately invested $5.8 billion for a 50% stake in the venture scaling up this architecture. Over the next decade, especially with vehicles becoming more and more connected, this segment of the business could be Rivian's biggest. Software typically has high profit margins, and if it's embedded in millions of vehicles, revenues can be recurring and "sticky."

So while Rivian's new vehicles should get all the attention in coming years, software could ultimately become Rivian's biggest profit generator over the next decade.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

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Shares of electric-vehicle maker Rivian (NASDAQ: RIVN) have been up and down in 2025. That's a pattern that might make some investors cautious. But when we take a longer view, I think there's a terrific investing story here, even though recent sales trends haven't looked encouraging.

Rivian's growth hasn't stalled -- it's in a lull

A quick take on Rivian might be, "Eh, the company's sales seem stuck at around 50,000 a year, and that isn't enough to be profitable. In fact, its deliveries were actually down slightly in 2024 versus 2023. Without growth, this thing is doomed."

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That take would be missing something very important: Rivian's sales stand an excellent chance of growing dramatically soon, thanks to an important new model that's currently under development.

Rivian's upcoming R2 is a midsize electric SUV. It's expected to start around $45,000 when production begins in the first half of 2026. Image source: Rivian.

That's the R2, the long-awaited lower-cost Rivian. Expected to start around $45,000, Rivian's plan for the R2 is to bring its great range, thoughtful features, and off-road prowess to market in a slightly smaller package -- and, crucially, a package that's significantly less expensive to manufacture.

Rivian has been hard at work on the R2, of course. At the same time, while sales of its existing R1-series models and commercial vans haven't been growing much, Rivian has been very busy making them less expensive to produce while simultaneously making them better vehicles. Rivian said last month that its cost of goods sold per vehicle dropped by more than $22,600 in the first quarter from a year earlier, even as it rolled out new features.

Rivian also said last month that the R2's development is on schedule, by the way. That's a bigger deal than you might think. Developing a new vehicle and preparing to manufacture it at scale is a years-long, hugely expensive process. For a company like Rivian to be on track at this still-early stage of its existence is a testament to the adept leadership of CEO RJ Scaringe and his management team -- and that's always a bullish indicator.

Rivian's numbers: They're quite good in context

Rivian isn't profitable yet, but it wasn't expected to be profitable by now. It's still using cash -- $188 million in the first quarter, along with $338 million in capex -- but it has had positive gross profit for the last two quarters, thanks to those falling costs. Last month it confirmed it still expects to have a modest positive gross profit for the full year, despite the impacts of tariffs and policy changes.

Meanwhile, it has plenty of cash on hand, $7.2 billion as of the end of March, and more coming very soon. As part of the $5.8 billion joint-venture deal it signed with Volkswagen (OTC: VWAGY) last year, Rivian is expecting an incremental $1 billion investment by the end of June.

That should be more than enough, Rivian has said, to get R2 production up to speed and to launch an additional model line, the even-smaller R3 series, likely in early 2027. By then, the company should have meaningful positive free cash flow.

It's also worth noting that Rivian plans to sell the R2 in Europe, a big potential source of additional demand that should help insulate it from any EV policy changes that might be forthcoming in the United States.

The takeaway: If you want an EV stock, Rivian is a nice choice

I've always liked Rivian as a company, and at recent prices it's easy to recommend as an investment. Having spoken with Scaringe and other Rivian executives several times over the years, I feel that this is a confident, well-run company that walks its positive, environmentally responsible talk -- and it's on track to become nicely profitable within a few years.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Tesla's (NASDAQ: TSLA) sales were down 49% in Europe in April, accelerating losses the company reported earlier in the year. That bodes poorly for the company's finances ahead of possible subsidy cuts in the U.S.

*Stock prices used were end-of-day prices of May 27, 2025. The video was published on May 28, 2025.

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Volkswagen Ag. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Rivian Automotive (NASDAQ: RIVN) shares have surged over the past month, rising in value by roughly 50%. But don't think that it's too late to take advantage. The electric vehicle maker is about to experience a huge jump in growth, a surge that could persist for several years.

Shares still look like a strong buy for patient investors, but there is one particular risk that every investor must be aware of before diving in.

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Rivian's growth is about to explode

It takes a long time to get a new vehicle from the design stage to production and final delivery. A long time. Rivian was initially founded in 2009 as Mainstream Motors. It didn't release its first vehicle, the R1T, until 2021 -- more than a decade later. The R1S, which uses essentially the same platform as the R1T, was released the following year.

It's not surprising that it took Rivian this long. Often, new vehicles from new manufacturers like Rivian involve novel design and engineering concepts, especially for electric vehicles. Production facilities, meanwhile, need to be built and scaled up from scratch. And then you have the litany of regulatory and safety hurdles to pass, nonetheless sourcing various parts from potentially dozens of third-party suppliers.

Production of the R1T was delayed several times simply due to global chip shortages -- a small but critical component that makes the vehicle possible. And in Rivian's case, you also need to develop the software necessary to not only run the vehicle itself, but also deliver on any promised self-driving capabilities.

One of the biggest barriers isn't even about making the car from a physical standpoint, but funding the car from a capital standpoint. It takes billions of dollars to get vehicles like the R1T and R1S to market, not to mention years and years of patient capital. It's hard to find investors willing to fund a company for more than a decade with zero revenue -- a major reason why so many EV start-ups have gone under over the decades.

When the R1T and R1S made it to market, Rivian's sales exploded from essentially zero to more than $5 billion. Revenue has stagnated in recent quarters due to a lack of new models.

But starting next year, we should see growth surge yet again thanks to the introduction of three new vehicles: the R2, R3, and R3X. All are priced under $50,000, making Rivian's vehicles affordable to millions of new buyers. It will likely still be a year or two until all of these models are in production and on the road, but as we've seen, that's nothing compared to the full timeline involved in bringing new models to market.

We are now in the final innings of Rivian's dormant growth phase. Both 2026 and 2027 should see sales surge to historic levels, and despite the recent stock price spike, shares still trade at under 4 times sales. But before you jump in, you must understand the primary risk factor.

Image source: Getty Images.

Don't buy Rivian stock before understanding this risk

Production timelines rarely go according to plan. So while management expects to start production on the R2 in 2026, don't expect a full production ramp-up until late in the year, and possibly even into 2027. The same will be true of the company's R3 and R3X models, which may not reach customers in any meaningful way until 2027.

Compared to full vehicle production timelines, waiting 12 to 24 months is small potatoes. But for the production ramp to translate into significantly higher sales, it could take several years beyond the start of production. That makes Rivian a multi-year story.

Yes, the valuation is cheap, especially compared to other EV stocks. But it will require years of patience for investors to realize the biggest gains. That's easier said than done.Despite the recent stock price spike, Rivian is still a strong buy. But patience will be necessary.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Unless you've been purposely avoiding the news, you've surely heard about the Trump administration's tariffs. While Trump has used tariffs as bargaining chips and to influence foreign policy, the auto industry has been concerned that it could see raised prices, reduced sales, and less profit.

For Rivian Automotive (NASDAQ: RIVN) investors, there's a little bit of good news on the tariff front and with one strategy it used to offset some of the tariff headwinds.

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Image source: Rivian.

Relief is coming

The first bit of good news for Rivian investors is the Trump administration's tariff relief. Currently, there's a 25% tariff on imported vehicles, and a 25% tariff on vehicle parts that began on May 3.

A couple of executive orders are expected to provide some relief for the automotive industry. Essentially, for a vehicle with 50% imported parts, the automaker would only have to pay tariffs on 35% of the vehicle for the first year. The rebate is then lowered in year two and then phased out. That means that a vehicle with 85% domestic parts will avoid tariffs during the first year – it should be noted 85% is a high percentage of domestic parts.

A separate executive order noted that automakers would pay only up to a 25% tariff on a vehicle and its parts, and would not have to pay additional import taxes on aluminum and steel used in the vehicle, or because it was imported from Canada or Mexico.

While the relief is welcomed, not everyone thinks it's hugely helpful. One such person is Dan Ives, managing director of autos at Wedbush Securities, according to the Detroit Free Press: "It's akin to having a car accident and saying, 'Oh good, it's not totaled, but it's still $20,000 worth of damage.'"

Rivian's quiet gamble

In a strategic move, Rivian quietly began building a reserve of electric vehicle (EV) batteries from Asia ahead of the Trump administration's tariffs. The small gamble is paying off and gives the company a little insurance against the tariff pressure being applied on the entire automotive supply chain.

Rivian even acquired a supply of lithium-iron phosphate cells from China's Gotion High-Tech Co. before the U.S. election and more recently worked with cell supplier Samsung SDI to move a substantial amount of battery inventory to the U.S. from South Korea.

Ultimately, the moves should help ease potential supply chain complications and costs from the tariffs, but it won't last forever. Rivian will have higher domestic parts usage than mainstream automakers, such as Ford Motor Company and General Motors, but the tariffs on parts will still sting the automaker.

What it all means

The tariff relief, even if not as helpful as investors would like, is welcomed by the automotive industry, and Rivian's foresight to stockpile battery supplies ahead of the tariff announcements was a smart move to help offset some of the near-term costs. It's important, because the battery cells that Rivian uses from vehicle electrification specialist Gotion largely go in its commercial delivery van, primarily for Amazon.

But 2025 is still setting up to be a lackluster year for Rivian as sales for its R1 vehicles seem to have peaked, and the launch of its R2 model -- more modestly priced to appeal to a larger swath of customers -- won't happen until 2026, and it can't come soon enough.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Investors knew 2025 could be a slow year for Rivian Automotive (NASDAQ: RIVN). The company's next vehicle launch, the highly anticipated R2, won't hit roads until 2026, and the company lacks any real visible catalysts. The good news for investors is that the automaker is finally gearing up to do a big marketing push, and it should provide a boost to stagnating sales.

What's going on?

Rivian's customers are passionate and invested in the brand, even though it's a relatively small player in the electric vehicle (EV) market. Independently run Rivian Clubs of America are in 35 states and Washington, D.C., and Rivian plans to tap into its passionate consumer base for its first big marketing campaign.

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The campaign, called "Real Rivian Adventures," takes real stories from real Rivian owners and turns them into advertisements. One example, an advertisement called "Last Lemonade Standing," was conjured from a Rivian owner's Facebook post and has a neighborhood boy using a Rivian outlet to blend lemonade slushies to outdo a competing stand.

According to Denise Cherry, Rivian's vice president of marketing, it's the first ad in a series spotlighting owner stories that will include streaming services, social media, and possible buys on broadcast TV.

Rivian's R1T. Image source: Rivian.

Needing a spark

Rivian's marketing push comes at a good time considering its sales have been lackluster in 2025. In fact, first-quarter sales declined 36%, driven lower by fewer commercial van deliveries and weak demand, partially due to the impact of L.A. fires in a crucial California EV market. Rivian reaffirmed its full-year delivery guidance of 46,000 to 51,000 vehicles -- roughly in line with the prior year's 51,579 deliveries.

Data source: Rivian press releases. Chart by author.

The upcoming R2, R3, and R3X will open the door to a more mainstream consumer thanks to their lower price tag. Rivian R1T and R1S start at roughly $70,000 and $75,900, respectively, but the R2 price tag will check in around $45,000.

"We are hyper-focused on how we start to ramp our awareness, get our brand out into the hearts and minds of consumers ahead of that release," Cherry said in an interview, according to Automotive News.

What it all means

2025 was to be a quiet year for Rivian, but the move to shake things up and grow brand awareness with a big marketing push could deliver just the spark Rivian's sales need. Further, increasing brand awareness ahead of the R2 launch is a big step forward for the company.

Rivian really needs to the R2 to be a hit with consumers, provide a spark to sales, and hopefully increase the company's scale with additional production volume. The good news is that the R2 is on track for its launch date, and the company has made construction progress on its Normal, Illinois plant, which will be the first place the R2 is produced. Once construction finishes, the plant will be able to produce 215,000 vehicles annually, up from the status quo of 150,000 vehicles.

Rivian remains a highly speculative and risky stock to own, and it should remain a small position in any portfolio. But if the R2 is a big hit, 2026 should be a strong year for the young EV maker.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

It's been a wild ride for investors in Rivian Automotive (NASDAQ: RIVN) and Nio (NYSE: NIO), filled with ups and downs. Both companies have previously had solid momentum behind them, and faced headwinds, setbacks, or disruptions. Both also still have much to prove to investors.

One analyst recently cast doubt on Rivian's gross profit, and Nio will need to show that it can offset the effects of China's brutal price war. Let's dive into both electric vehicle (EV) makers below and see what may lay ahead for them.

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Gross profit in doubt?

One of the biggest takeaways from Rivian's fourth quarter was that it achieved $170 million in gross profit, which is simply total revenue minus the cost of revenue. It was a sizable win compared to analysts' estimates of $49 million in gross profit and was the company's first quarterly gross profit in its short history.

While the company certainly made progress -- Rivian's cost of revenue dropped 18.6% while revenue spiked 31.9% higher -- there was a small drawback. That came in the form of sharply higher sales of regulatory credits, which added $299 million in revenue during the fourth quarter. Regulatory credits are awarded to automakers that produce and sell electric vehicles, and the excess can be sold to other automakers that need the credits to meet emissions standards.

Rivian expects sales of regulatory credits to be similar for 2025 and guided for a positive gross profit for the full-year. Doing so would be a big step toward proving to investors that it has a path to profitability.

At least one analyst disagrees with Rivian's management. Bernstein's Daniel Roeska warned that the company may fail to reach that goal until 2027.

It's true that Rivian will face challenges. Its delivery growth has stalled, so much of the automaker's gross profit improvement will come from a reduction in revenue costs. The company lacks a revenue catalyst, with the R2 not set to hit the roads until the first half of 2026.

Gross profit will be something that analysts and investors both focus on throughout 2025, and it would go a long way if Rivian could achieve its full-year positive gross profit.

Where art thou, revenue growth?

Meanwhile, Nio is expected to see strong momentum throughout 2025, driven by two new brands, Onvo and Firefly. In fact, during Q4, the company's deliveries broke down to 52,760 from its premium Nio brand and 19,929 from its Onvo brand. As deliveries of both Onvo and Firefly accelerate it is expected to drive strong revenue and delivery growth, but that didn't materialize quite as expected during Q4 with Firefly only having just launched.

Nio's Q4 deliveries were up 45% compared to the prior year, but its total revenue jumped a much lesser 15.2%, suggesting that the exhaustingly brutal price war in China is having a large effect on its pricing power.

Nio's first-quarter deliveries were in line with management's guidance at 42,094. But investors must remember the disappointment from that guidance, as it fell far short of analysts' original expectation of 65,000 in deliveries.

Information source: Nio delivery press releases. Graphic source: Author.

Something to prove

Over the past three years, Rivian and Nio have shed 70% and 82% of their value, respectively, and both certainly have much to prove to investors on their way toward profitability. It won't happen overnight, but if Rivian can achieve full-year 2025 gross profit, perhaps even with less reliance on regulatory credit sales, and Nio can offset the weight of China's price war, both will set themselves up for a much brighter future.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.