Rivian Automotive (NasdaqGS:RIVN) Q4 2025 Earnings call February 12, 2026 05:00 PM ET Company ParticipantsAndrew Percoco - Executive Director of Equity ResearchClaire McDonough - CFOJavier Varela - COOJoseph Spak - Managing DirectorRJ Scaringe - CEOConference Call ParticipantsBen Kallo - Senior Research AnalystChris Pierce - Senior AnalystDan Levy - Senior Equity Research AnalystEmmanuel Rosner - Managing Director and Senior Autos and Auto Tech AnalystGeorge Gianarikas - Managing Director and Senior Analyst ...

Core Viewpoint - Rivian Automotive's stock is currently undervalued, presenting a potential investment opportunity as the company prepares for significant growth in sales and profitability in the coming years [1][2]. Group 1: Sales Growth Potential - Rivian is expected to experience major sales growth in 2026, driven by its aggressive push into self-driving technology and the introduction of in-house silicon chips and a next-gen computer [3][4]. - The imminent launch of Rivian's new model, the R2, priced at $45,000, is anticipated to attract a broader customer base, tapping into tens of millions of potential buyers who prefer vehicles under $50,000 [5][6]. - Sales growth is projected to jump to 27% in 2026, compared to a modest 8% growth rate in 2025 [6]. Group 2: Profitability Outlook - Rivian's stock trades at a significant discount compared to peers like Tesla, but this valuation gap may narrow as the company approaches profitability, particularly with the R2 model's sales expected to ramp up [7]. - The CEO's compensation structure includes bonuses tied to achieving profitability, which could be realized as the company scales up production and sales of the R2 [7].

Core Viewpoint - Rivian Automotive is set to announce its fourth-quarter earnings on February 12, with investors keenly observing the company's efforts to diversify its business model beyond traditional vehicle sales to include software and services as potential growth drivers [1] Group 1: Production and Delivery Performance - Rivian's fourth-quarter deliveries fell 31% year over year to 9,745 vehicles, primarily due to demand being pulled forward to the third quarter, where 13,201 vehicles were delivered [2] - The decline in deliveries reflects broader trends in the electric vehicle (EV) sector, with management indicating that they anticipated this volume decline [3] Group 2: Tax Credit and Market Position - Rivian vehicles are not eligible for the tax credit in 2025 due to failure to meet domestic battery sourcing requirements, which may limit their appeal to potential buyers [3] - The starting price of Rivian's flagship R1S is $76,990, targeting wealthier households who may not qualify for EV incentives, further complicating the company's market position [3] Group 3: Business Model Diversification - The uncertainty surrounding the tax credit is impacting Rivian and the broader EV industry, highlighting the necessity for the company to diversify its business model beyond just manufacturing and delivering vehicles [4] - Rivian's partnership with Volkswagen, established in late 2024, focuses on software and vehicle electronics, which may become a more significant aspect of its business strategy [5] Group 4: Financial Implications of Partnerships - The joint venture with Volkswagen is expected to provide Rivian with an infusion of cash, with Volkswagen committing to invest up to $5.8 billion by 2027 [6] - This partnership will also allow Rivian to achieve economies of scale by purchasing components in larger volumes, potentially reducing costs [6]

Core Insights - Rivian Automotive is preparing for a slow year in 2025 with no vehicle launches, focusing on production readiness for the R2 model [1] - Despite challenges such as changing trade policies and the end of the federal EV tax credit, Rivian's stock has surged nearly 50% in 2025 due to anticipation surrounding the R2 [2] Production and Validation - Rivian has begun rolling out validation units from its updated Normal, Illinois factory, which is set to produce the R2 in the first half of 2026 [3] - The decision to accelerate production and delay the Georgia factory has saved the company over $2.25 billion, generating excitement among investors [4] Market Impact - The R2 is designed to be a higher-volume, lower-cost vehicle, expanding Rivian's market reach beyond its premium R1S and R1T models [5] - Validation production units are crucial as they represent the final stage before saleable production, used for certifications and testing [6] Delivery Expectations - Deliveries of the R2 are expected to commence at the end of Q1 or beginning of Q2, with a base trim price starting around $45,000 [7] - Rivian is focused on cost reduction for the R2 and is actively updating its Illinois factory to support production [7]

Core Viewpoint - Rivian Automotive is recalling 19,641 previously serviced R1S and R1T electric vehicles in the U.S. due to incorrectly assembled rear toe links [1] Group 1 - The recall affects a total of 19,641 electric vehicles [1] - The issue is related to the rear toe link assembly, which has been identified as incorrectly assembled [1] - The recall is being conducted in accordance with the U.S. National Highway Traffic Safety Administration's regulations [1]

Core Viewpoint - Rivian Automotive's stock has shown significant growth recently, with a more than 40% increase in value over the past month, indicating potential for further gains in 2026 [1][2]. Company Performance - Rivian's stock price remained relatively stable from January 1 to November 1, 2025, with minimal fluctuations [1]. - The current stock price is $20.89, with a market capitalization of $26 billion [5]. Competitive Positioning - Rivian is positioned as a potential competitor to Tesla, especially with the upcoming launch of the R2 model, which will be priced under $50,000, allowing it to target a broader consumer base [12][13]. - Currently, Rivian's R1S and R1T models are priced above $70,000, limiting their market reach [13]. AI Investment and Market Trends - Rivian has been investing heavily in AI, similar to Tesla, which has contributed to its recent stock performance [9][8]. - The AI sector has seen strong performance in 2025, and Rivian's classification as an AI stock has positively impacted its share price [8][9]. Future Outlook - Rivian is expected to strengthen its AI capabilities and expand its vehicle offerings in 2026, which could enhance its competitive position against Tesla [10][14]. - The anticipated production of the R2 model and subsequent models (R3 and R3X) will provide Rivian with more real-world data, further enhancing its AI systems [13][14].

Core Insights - The automotive industry in the U.S. experienced significant challenges in 2025, particularly for electric vehicle (EV) manufacturers like Tesla, Rivian, and Lucid [1] Tesla - Tesla reported a 23% decline in U.S. sales in November and a 48.5% drop in European sales in October, with a total delivery of over 1.21 million units for the first three quarters of 2025, marking a nearly 6% decrease from 1.29 million units in the previous year [2][3] - The company introduced refreshed models, including the six-seater Model Y L, which is expanding into Europe, while the Cybertruck has not met sales expectations despite marketing efforts [4] - Tesla's valuation remains the highest in the automotive sector, exceeding $1.6 trillion, significantly outpacing competitors like Toyota and Ford [5][6] - Legal challenges include multiple lawsuits related to its Full Self-Driving (FSD) technology and a wrongful death case resulting in a $243 million judgment [18][19] Rivian - Rivian had a mixed sales performance, with over 13,702 units delivered in Q3, but faced challenges due to tariffs affecting production costs [6][7] - The company is constructing a multi-billion-dollar EV plant in Georgia, crucial for its upcoming R2 crossover SUV [7] - Rivian is also exploring autonomous driving technology, offering a subscription service for its Universal Hands Free system [15] Lucid - Lucid achieved record delivery and production figures in Q3, delivering 4,078 units and producing an additional 1,000 units for the Saudi market [8] - Despite the launch of the Gravity Touring SUV at a lower price point, Lucid's stock fell to an all-time low, and the company reduced its production guidance for 2025 to 18,000-20,000 vehicles [9] - Lucid signed a deal with Uber to deploy over 20,000 Robotaxis across the U.S. starting next year [14] Industry Trends - The push for Robotaxis is evident, with Tesla and Lucid making significant strides in this area, while Rivian may enter the market depending on conditions [12][14] - The focus on autonomous driving capabilities is growing, with both Tesla and Rivian enhancing their technologies [15][16] - The automotive sector is expected to face continued challenges and competition as companies aim to achieve their milestones in 2026 [21][22]

Core Viewpoint - Rivian Automotive is approaching a critical inflection point, with significant stock performance driven by advancements in artificial intelligence and the introduction of new, more affordable vehicle models [1] Group 1: Stock Performance and Market Sentiment - Rivian's stock has increased nearly 70% since the beginning of 2025, with most gains occurring in the last month or two [1] - The market's bullish sentiment is attributed to two main catalysts: advancements in AI and the launch of cheaper vehicle models [1] Group 2: Financial Position and Challenges - Rivian has a market capitalization of $26 billion, with a current stock price of $21.13 [2] - The company has been losing money each quarter but has recently achieved positive gross margins [8] - Rivian's dependency on external capital remains a concern, although a multibillion-dollar agreement with Volkswagen has alleviated some financial pressures [8] Group 3: Future Growth Catalysts - Rivian plans to begin production of the R2 model in early 2026, which will be priced under $50,000, making it accessible to a broader market [10] - The introduction of the R2 and other affordable models is expected to significantly improve production scale and financial sustainability [11] - While net profit margins may not be realized in the 2026 fiscal year, the new models are anticipated to enhance Rivian's market position and reduce reliance on capital markets [12]

Industry Overview - Electric vehicle stocks, including manufacturers, battery suppliers, and charging infrastructure providers, are gaining attention for their potential growth due to increasing EV adoption and technological advancements [2] - These stocks are characterized by high trading volumes and are subject to industry-specific risks such as rapid technological changes, supply chain constraints, and intense competition [2] Company Summaries - **Tesla, Inc.** designs, develops, manufactures, leases, and sells electric vehicles and energy systems globally, operating in two segments: Automotive and Energy Generation and Storage [3] - **Rivian Automotive, Inc.** focuses on designing, developing, and manufacturing electric vehicles, offering consumer models like the R1T pickup truck and R1S SUV [4] - **XPeng Inc.** specializes in smart electric vehicles in China, providing a range of models including SUVs and sedans, along with various services such as auto financing and ride-hailing [4]

Core Insights - The electric vehicle (EV) market is experiencing significant consumer enthusiasm, driven by advancements in autonomous technology and the need for improved charging infrastructure [2][4][10] - Affordability and vehicle form factors are critical factors influencing consumer adoption of EVs, particularly for families seeking practical options [3][4] - Rivian is positioning itself competitively in the EV market with its upcoming R2 vehicles, targeting a price range of $45,000 to $55,000, and plans to enhance autonomy features [6][7][12] Industry Trends - The development of charging infrastructure is a key barrier to wider EV adoption, with many potential consumers waiting for improvements before making the switch [1][4] - The integration of autonomy in EVs is expected to accelerate adoption, as consumers value the convenience and time savings associated with autonomous driving [5][20] - Companies like Tesla and Rivian are leading the charge in autonomous technology, with Rivian's plans for a hands-free driving feature and Tesla's successful robo-taxi launch [8][11] Company Analysis - General Motors is highlighted as a strong player in the EV market, particularly with its full-size pickups and SUVs, despite some criticism regarding its transition strategy from internal combustion engines to EVs [10][12] - Rivian is recognized for its innovative approach, including in-house development of processors and software, which may provide a competitive advantage in the EV space [12] - The potential for personal vehicle autonomy is seen as a transformative opportunity, allowing consumers to utilize their vehicles in new ways, such as self-driving to pick up passengers [18][20]