RIVN
Electric vehicle upstart, Rivian Automotive Inc., announced today that quarterly deliveries for the third quarter were 6,584 vehicles to customers. Further, the company reiterated that it would build 25,000 pickups and SUVs this year after producing 7,363 during the quarter. Shares were trading up by over 8% in the morning trading session, last exchanging hands at $34.50. Shares of the automaker are off by almost 80% from their November 2021 all-time high, and well off from the initial public listing price of $78. Rivian has also slightly underperformed the S&P 500 on a year-to-date basis, down 66.6% versus the 21.4% decline in the benchmark index.
Rivian’s IPO in November of last year was amongst the largest of 2021 and the company’s shares initially soared just as the market was hitting its zenith. The company has added back $2 billion of market value to its capitalization just this morning and currently carries an enterprise value of $18 billion. Technical indicators suggest resistance for the stock around $41, which is where a recent double top was formed. That might still give savvy traders enough of an opportunity to consider the company a buy. Some of Rivian’s largest shareholders have also increased their stake in the company recently.
The company only has two products out in the commercial market at the moment, the R1T pickup and the R1S sport utility vehicle. The automaker has tried to target the other end of the vehicle market than bigger competitor Tesla, which mostly focuses on the family sedan category. Rivian also makes electric delivery vans for Amazon.com, who also happens to be one of the company’s biggest shareholders. Amazon announced earlier this year that it had started making deliveries using Rivian’s vans. The EV manufacturer is contractually obligated to deliver 100,000 vans to the e-commerce giant by the end of this decade.
Rivian’s third quarter jump in production reflected a 67% boost from the second quarter, which was significantly higher than Tesla’s 41% increase, albeit Rivian is working from a much smaller base. Shares have been pressured this year partly because the current 25,000 full year target is only half of the initial 50,000 vehicles the company was aiming for around the time of its IPO. Supply chain issues have hampered even the largest automobile companies since the start of the pandemic and Rivian’s small market footprint means that it doesn’t always receive the level of priority from its suppliers as bigger competitors like Ford and Toyota.
Still, Rivian remains one of the most exciting prospects in the electric vehicle space which has been inundated with a flood of new participants over the past four to five years. The large backing by Amazon, its focus on the higher margin SUV and pickup space, and the company’s strong technology leadership have all made the company one of the standouts for its product quality and performance. The company also remains a darling of Wall Street’s with only two research analysts attaching a sell rating to the stock.
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