Tariffs, Spin-Out, and R2 Updates Are Positive Signs for Rivian

Core Insights - Rivian Automotive received positive news with a nearly 8% increase in shares following President Trump's announcement of significant tariffs on foreign cars and components, which came after a downgrade by analysts that caused a 4% drop in shares [1][2] Company Developments - Rivian announced the spin-out of its micromobility business, which will be sold as a new firm called Also, while retaining a substantial minority stake [2][5] - The micromobility market is projected to grow significantly, with McKinsey forecasting a 95% to 306% increase in micromobility trips by 2035, potentially providing a secondary revenue stream for Rivian [3] - Rivian achieved a positive gross margin for the first time in Q4, indicating progress towards profitability, although it still faces challenges in achieving consistent free cash flow or net income [4][8] Production and Cost Management - Rivian is progressing on the launch of its next vehicle, the R2, with deliveries expected to begin in the second half of 2026, which is crucial for the company's path to profitability [7][12] - The company anticipates material costs for the R2 to be around half that of the R1, along with a more than 50% reduction in non-material costs, which could significantly enhance gross margin and overall profitability [8][9] Market Impact of Tariffs - The newly announced 25% tariffs on foreign autos and components are expected to increase Rivian's price competitiveness, although the company may face higher component costs due to international sourcing [10][11] - Despite the potential for increased costs, the tariff news is viewed as a net positive for Rivian and Tesla, enhancing their competitive position against other automakers [11][12]