As one of the most hotly anticipated EV startups of recent years, Rivian stirred up tremendous investor enthusiasm when it debuted in late 2021 with the launch of its first electric adventure pickup truck and SUV models. Let‘s analyze in depth how the stock has performed since, where its price stands today and what the future outlook holds.
Overview
Founded in 2009 and backed by e-commerce giant Amazon along with Ford, Rivian is focused on sustainable transportation. The R1T pickup and R1S SUV target outdoorsy consumers and off-road driving enthusiasts. A separate contract with Amazon involving 100,000 electric delivery vans also aims to electrify their logistics fleet.
After a blockbuster IPO in November 2021, Rivian‘s share price has declined nearly 60% from all-time highs. But recent production ramp-up progress and its differentiated brand catering to a niche audience continue making it an intriguing investment proposition.
Rivian Stock Price History
Rivian first listed on the NASDAQ exchange on November 10th 2021 at an Initial Public Offering price of $78 per share. The IPO raised close to $12 billion for the company, marking one of the largest US stock debuts in recent years.
| Date | Closing Price | Notes |
|---|---|---|
| Nov 10, 2021 | $100.73 | IPO debut |
| Nov 16, 2021 | $172.01 | All-time peak closing price |
| July 14, 2022 | $31.48 | Current price as of writing |
Buoyed by tremendous hype as the hottest new EV startup, Rivian‘s share price registered massive early gains – soaring 120% from its IPO price in less than a week to an all-time high of $172!
That eye-popping rise propelled its valuation briefly over $150 billion – exceeding major US automakers Ford and GM. However, the stock has since experienced substantial volatility after those stellar early gains.
In line with the broader market downturn impacting speculative growth names, Rivian stock declined nearly 80% from its 2021 peak by late May 2022. More recently, shares have stabilized and even posted a slight recovery off 52-week low levels below $20 as macro volatility eased and production targets were reaffirmed.
Key Share Price Drivers
As investors assess Rivian‘s investment case at current levels, several core factors determine near future share price outlook:
Production Ramp-Up Progress
Rivian has set a target to manufacture 50,000 vehicles in 2023 – a key milestone as it aims to scale up rapidly from 2022 output of just over 24,000 units.
| Production | 2022 | 2023 Target |
|---|---|---|
| Units | 24,337 | 50,000 |
Hitting output goals reliably will be crucial to start delivering returns on the billions invested so far by shareholders into manufacturing capacity and expansion plans.
Any major new supply-chain hurdles or demand slowdown forcing revision of those 50,000 unit hopes would undermine investor confidence. Positive surprises on delivery volumes beating guidance would conversely boost share price.
Financial Health
Like most high-growth EV makers, Rivian continues investing heavily in ramping up operations rather than focusing on profitability for now. That strategy has added up to nearly $4.75 billion in net losses over the past year.
In fact, Rivian warned shareholders it expects expenses and cash burn to remain high, projecting over $15 billion cumulative capex and R&D spending from 2023-2025 as factories, products and charging infrastructure continue scaling up.
With around $13 billion cash on hand currently, Rivian has some buffer before facing any financing risks. But Wall Street remains wary of cash burn rates and rising costs amid inflationary pressures, so slower than expected progress to profitability poses share price risks.
Demand Indicators
While most Rivian models remain sold out into 2023 and even 2024 from strong initial reception, investors closely track various demand signals to gauge longer-term consumer enthusiasm.
Metrics like order backlogs and wait times, reservation list growth, used vehicle value retention and production slots expanding to new regions all play a role. Any hints of waning interest before expanded lineups arrive later this decade would negatively sway share price outlook.
Partnership Pipeline
Rivian‘s existing ties with Amazon for at least 100,000 electric delivery vans by 2030 is pivotal, ensuring reliable near-term revenue visibility. Updates like contract modifications, production delays or fleet adoption challenges could substantially impact investor sentiment.
Meanwhile speculation around potential new collaborations or strategic investors has cropped up occasionally – like rumors of licensing Rivian‘s flexible skateboard platform to other automakers, although no deal has materialized yet. Landing a major new partnership would energize the stock.
Competitive Positioning
20 legacy automakers and dozens of well-funded startups like Lucid mean competition is intensifying rapidly. While Rivian‘s brand identity targeting adventure-focused consumers differentiates it somewhat, trucks/SUVs incoming from Ford, GM and others will make margin pressure and market share battles tougher over time.
Most forecasts suggest EV sales rising multi-fold this decade as adoption inflects. Rivian controlling a few percentage points of that global volume by 2030 would still make it a success. But losing ground quickly to deeper-pocketed adversaries poses share price risks investors are wary of.
The Verdict?
Rivian remains a higher-risk, higher-potential reward EV startup bet with its niche positioning, passionate early following, blue-chip backers and billions in the bank providing confidence it can continue executing expansion plans through at least 2025.
Near term momentum on production ramp-up and order book trends make me cautiously optimistic on share upside from current levels. But I recommend keeping a close eye on the core value drivers analyzed above as increasing competition, execution missteps or any setbacks on those fronts could easily deflate the stock again.
