RIVN - Rivian: Smart Investors Avoided This Unprofitable EV Maker

2024-02-23 08:30:00 ET

Summary

• Rivian's lack of profitability and poor fundamentals are coming home to roost.
• Rivian guided to a markedly lower-than-expected Q1 production outlook.
• Rivian's lack of scale and sustainable moat makes it highly challenging to compete effectively as EV growth has slowed.
• Its lack of diversification compared to its legacy peers has intensified its concentration risks.
• With Rivian not expected to turn profitable through 2027, why are RIVN holders still holding on to their pain?

Investors in pure-play EV automaker Rivian Automotive, Inc. (RIVN) have experienced significant volatility since my previous update in November 2023 . While I anticipated RIVN's selling pressure had abated in my November article, I cautioned investors about turning bullish on RIVN. I highlighted that Rivian's lack of profitability is a crucial concern. Furthermore, I underscored the need for Rivian to demonstrate its ability to "continue scaling up on its R1 platform" while also "building up the underlying demand for its R2 and EDV in the medium term."...

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