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Rivian Automotive makes all-electric trucks and delivery vans.
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It’s about to broaden its reach from the high end to the mass market.
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Rivian has just unveiled new technology that could be critical to its future.
Rivian Automotive (NASDAQ: RIVN) is attempting to break into the automotive sector by leveraging new technology to compete and partner with large automakers. That is a very tall order, but if it succeeds, the company could help set investors up for life.
The massive price gains in the shares of Tesla, an electric vehicle (EV) pioneer, hint at the possibilities. There’s just one problem. Here’s what that is.
Rivian does three different things right now, all of which are important. Most prominently, it makes an all-electric truck for the consumer market. The vehicles are award winning, but they sit at the high end of the cost spectrum. So there is a fairly limited customer base. That’s not a bad thing, however, because it is the same approach that Tesla used when it started out.
The second important business within Rivian is its delivery vehicles, designed for business customers. The big story there has long been the company’s partnership with Amazon. The EV sales have helped to generate revenue as Rivian builds out its consumer business and showcases its technology. Rivian is now selling its delivery trucks to other business customers.
The third business inside Rivian is centered on licensing its technology to other automakers. The major partner is Volkswagen, which has been providing capital to Rivian in exchange for access to the upstart EV company’s tech.
All in all, while Rivian is following Tesla’s lead in some ways, it has taken a much broader approach to building its business. That’s a good thing, given that Tesla entered the auto sector when there was little to no competition in the EV niche. Now, every major automaker and a host of EV start-ups are competing with each other in the EV market.
The next significant step for Rivian is the introduction of a mass-market truck known as the R2. That vehicle is expected to be launched in 2026. With roughly $7 billion in cash on the balance sheet at the end of the third quarter of 2025, it should have more than enough money to finish out the massive capital investment required to see the R2 effort through to completion.
There’s just one issue: Sales of EVs have weakened as government subsidies have fallen away. It is unclear whether the R2 will be as big a success as previously hoped. Rivian’s goal is to increase its sales volume so it can spread its costs over more vehicles. If that doesn’t happen to the extent hoped, it could be difficult for the company to turn a profit selling consumer-oriented vehicles.
