Rivian Automotive (NASDAQ:RIVN), once hailed as the future Tesla by some investors has recently seen its stock price plummet. Since 2022, shares of the electric vehicle (EV) specialist have plummeted 62% due to a confluence of company-specific difficulties and macroeconomic variables.
The stock price of Rivian NASDAQ:RIVN shares have had a rough ride since the business went public at the end of last year, but has widespread disapproval subsided? When it comes to the rapidly expanding EV market, will Rivian get beyond the challenges it faces and come out on top? If this is true, early adopters who put money into the market at today’s lows may reap considerable benefits in the future.
Let’s attempt to address these concerns so potential EV stock buyers can form their own opinions.
Rivian’s Life Has Been a Wild Trip.
After the market close on August 11, Rivian (NASDAQ:RIVN), which offers electric “adventure” vehicles, including trucks and SUVs, reported its second-quarter profits. The firm’s $364 million in sales was above the $337.5 million predicted by market analysts, but it did so at the cost of a more enormous operational deficit in fiscal 2022, the firm told investors.
The company’s management has revised its full-year adjusted EBITDA loss forecast from $4.75 billion to $5.45 billion. The electric vehicle manufacturer lost $1.7 billion in the second quarter alone, or $1.89 per share, as it increased expenditures to develop its business.
Executives have restated their 2022 production target of 25,000 cars despite ongoing difficulties in the supply chain. Second quarter results for Rivian show 4,401 cars manufactured, a year-over-year increase of 72%. Rivian rolled out its EDV 700 electric delivery vans with Amazon (NASDAQ:AMZN) in more than a dozen nationwide locations. By the end of the year, Rivian expects to have thousands of electric delivery vehicles in service in 100 locations as part of its relationship with the e-commerce giant, and by 2030, it hopes to have provided 100,000 vans throughout the United States.
The business reports that 98,000 units have been ordered in advance as of June 30. If that’s the case, then there shouldn’t be any worries about demand for the EV industry, but shareholders should still keep an eye on Rivian’s efforts to turn a profit. Although it has plenty of cash ($15.5 billion in cash, cash equivalents, and restricted cash), the corporation hasn’t been stingy with its expenditures, using up $1.6 billion in cash in Q2 alone. While the company’s leadership is optimistic about its current cash position, there is no assurance that Rivian won’t exhaust its resources before generating a profit.
Should You Invest in Rivian Right Now?
Rivian NASDAQ:RIVN is a stock with enormous growth potential, with a market valuation of $35.1 billion. This is a fraction of Tesla’s market size. And yet, it still seems like a risky move. Both Tesla and several established manufacturers are putting up significant efforts to compete with the firm.
It will be fascinating to see how this turns out, but investors need to be mindful that buying shares of Rivian at the moment is fraught with danger.
Featured Image: Megapixl @Rafaelhenriquepress
Author Shariq Khan 
