Rivian: Should You Buy the Stock Before Its Next Big Milestone?

Core Insights - Rivian Automotive achieved a significant milestone by reporting its second consecutive quarter of gross profit, unlocking an additional $1 billion in funding from Volkswagen as part of a potential $5.8 billion investment [1][2] Financial Performance - Rivian's gross margin for the first quarter was 16.6%, surpassing Tesla's 16.3%, marking a substantial improvement from a negative gross margin of 44% a year ago [3][4] - The company reported first-quarter revenue of $1.24 billion, a 3% increase, despite a decline in vehicle deliveries, with automobile revenue falling 17% to $922 million, while software revenue tripled from $88 million to $318 million [8] - Rivian reduced its net loss from $1.5 billion a year ago to $541 million and decreased free cash outflows to $526 million from $1.5 billion [9] Production and Future Plans - Rivian is preparing for the launch of its lower-priced R2 SUV, projected to be priced around $45,000, which is expected to have broader market appeal [6][7] - The company plans to shut down its factory for about a month to retool for the R2's launch in the first half of 2026, which could trigger Volkswagen's next $1 billion investment [7] - Rivian is increasing its production capacity with an expansion of its Illinois factory and plans to begin construction of a new factory in Georgia next year [13] Strategic Focus - The company is focusing on higher-margin software, recently launching a hands-free driving feature and aiming for more autonomous self-driving capabilities [5] - Rivian has adjusted its delivery forecast to between 40,000 and 46,000 units, down from a previous estimate of 46,000 to 51,000 units, while maintaining guidance for a modest gross profit and an adjusted loss of $1.7 billion to $1.9 billion [11][12]