Key Points Rivian’s stock is up 67% in 2025 as I write this. The company’s R2 SUV is one of the most anticipated electric vehicles of 2026. 10 stocks we like better than Rivian Automotive › On Dec. 12, Rivian (NASDAQ: RIVN) shares reached $19 for the first time since Jan. 11, 2024, heading into the close of 2025 on a strong note. But investors can't ignore the stock's flat performance for the last three years. But there's reason to hope: The company's future electric SUV may be the spark it needs t ...

Core Insights - Rivian is advancing its electric vehicles towards greater autonomy, incorporating new hardware such as lidar and custom silicon, with aspirations to enter the self-driving ride-hail market [1][2] Technology Development - The company's first "Autonomy & AI Day" event revealed its technology advancements, aiming to produce the more affordable R2 SUV by the first half of 2026 [2] - Rivian plans to expand its hands-free driver-assistance software to over 3.5 million miles of roads in the USA and Canada, with a feature called "Universal Hands-Free" launching in early 2026 [3] Driver Assistance Features - The point-to-point navigation feature allows users to input a destination, enabling the vehicle to drive autonomously [4] - Future enhancements will allow drivers to take their eyes off the road, with plans to achieve "personal L4" autonomy, meaning no human intervention is required in specific areas [4] Market Competition - Rivian aims to compete with companies like Waymo, initially focusing on personally owned vehicles while also exploring opportunities in the rideshare market [5] Hardware Innovations - The company is developing a "large driving model" and a custom 5nm processor in collaboration with Arm and TSMC, moving away from Tesla's rules-based framework for autonomous vehicle development [7] - The new "autonomy computer" (ACM3) can process 5 billion pixels per second and will be featured in the upcoming R2 SUV [8][9] - The ACM3 will be paired with a lidar sensor to enhance real-time detection and spatial data processing, contributing to the vehicle's autonomy capabilities [9]

Core Viewpoint - Rivian Automotive is leveraging artificial intelligence to enhance investor confidence in its future profitability, as its electric vehicle (EV) business has not met expectations since its IPO in 2021 [2][3]. Company Performance - Rivian's shares have declined over 80% since its IPO, with ongoing challenges leading to slower sales and production [3]. - The company continues to incur significant annual losses despite efforts to reduce costs and increase software revenue through a $5.8 billion joint venture with Volkswagen [3][4]. - Rivian's sales decreased by 14% through the third quarter, yet its shares have risen over 30% this year due to operational profit gains and investor optimism surrounding new technologies and the upcoming "R2" vehicle launch [26][28]. AI and Autonomy Strategy - Rivian is hosting its first "Autonomy and AI Day" to showcase its AI-centric approach and future vehicle capabilities [2][8]. - CEO RJ Scaringe emphasizes an end-to-end AI-centric approach to differentiate Rivian's autonomous capabilities [5][19]. - The company aims to broaden the use cases for its hands-free systems and is exploring lidar technology for better environmental detection [19][20]. Market Position and Competition - Rivian is compared to Tesla and other EV manufacturers, with analysts noting it lags behind in advanced driver assistance systems (ADAS) [11][12]. - Wall Street analysts express skepticism about Rivian's ability to compete with established players like Tesla and Waymo in the autonomous vehicle space [17][27]. - Rivian's AI Day is expected to focus on vehicle capabilities and software initiatives rather than diversifying into non-core businesses [12]. Analyst Sentiment - Morgan Stanley downgraded Rivian to underweight, citing concerns over the company's scale and financial capacity to support investments in the current AV and AI hype cycle [7][8]. - Analysts expect Rivian to provide updated timelines and resource requirements for its next-generation features during the AI Day [14].

Core Insights - Automakers are adjusting their product strategies in response to the recent removal of a $7,500 federal tax credit for electric vehicles (EVs) and plug-in hybrids, focusing on more affordable models to attract buyers [1][5] Group 1: Automaker Strategies - Volkswagen is shifting its focus to hybrid vehicles, particularly full hybrids, due to lower costs and higher consumer demand, moving away from its previous strategy of prioritizing electric vehicles [2][3] - Lucid Group plans to introduce a more affordable electric model by the end of next year, having absorbed half the cost of the lost tax credit for its Air sedan [4] - Rivian is offering deals for its leased vehicles and is concentrating on launching the R2 SUV at a price around $45,000 in the first half of next year [6] Group 2: Market Trends - U.S. EV sales have not met earlier forecasts, with consumer hesitance regarding charging infrastructure and high prices contributing to this trend [5] - Traditional automakers, including General Motors, Ford, and Stellantis, are scaling back their EV plans in light of the changing regulatory environment and the loss of federal subsidies [7]

Production Timeline - Rivian R2 SUVs are expected to start production in 2028 [1] Project Status - The project is considered to have dealt with a lot of uncertainty in the last few years [1] - The recent event, while largely ceremonial, is an important step for the project [1]

Group 1: Company Challenges - Rivian shareholders face a crucial deadline with the expiration of the $7,500 federal tax credit by the end of the month, which could impact the company's near-term prospects [1] - The company has initiated its second workforce reduction of 2025, cutting approximately 150 employees, or 1.5% of its staff, primarily in commercial teams [2] - Rivian's stock has declined over 60% from all-time highs due to rising competition, sluggish demand, and a high cash burn rate, raising concerns about the expiration of the tax credit [3] Group 2: Product Development and Market Strategy - Rivian is preparing for the launch of its more affordable R2 SUV in 2026, targeting the mass-market segment with a starting price of $45,000 [4][5] - The R2 platform indicates a shift toward mass-market viability, expanding Rivian's addressable customer base beyond the $90,000 R1 flagship [5] - Rivian has achieved significant cost reductions, with R2's bill of materials costs contracted at roughly half the level of R1, positioning it for healthy gross margins [6] Group 3: Technological Advancements - Rivian's $5.8 billion software licensing partnership with Volkswagen validates its technological differentiation and provides recurring revenue streams [7] - The partnership represents one of the largest software licensing agreements in automotive history, showcasing the scalability of Rivian's software-defined vehicle architecture [7][8] - Rivian's clean-sheet approach utilizes just three computers compared to the industry-standard 100-plus electronic control units, enhancing its technological advantage [8]