Rivian Automotive revealed not one but three new vehicles Thursday, as the EV startup looks to fill a gap in the market even as EV demand appears to be slowing. RIVN shares surged Thursday after the announcement. Earlier in the day, a firm initiated coverage of Rivian stock, handing shares a buy rating.
Rivian unveiled the R2 — its smaller, cheaper, next-generation vehicle and platform — Thursday. The new vehicle offering is priced at an estimated starting price of $45,000. Rivian says the vehicle will also qualify for the $7,500 Inflation Reduction Act (IRA) tax credit.
The vehicle had been planned to be produced at Rivian's new factory in Georgia. However, the company announced Thursday it is pausing construction of its $5 billion factory and is opening a R2 production line at its Illinois plant. Production of the R2 platform is expected to begin in 2026. Rivian announced Thursday the SUV can get more than 300 miles of range. Deliveries are expected to begin in the first half of 2026.
"I'm so excited about what it represents for us as a company in terms of achieving scale," Rivian Chief Executive RJ Scaringe said Thursday.
The Irvine, Calif.-based company also announced the R3, a more compact crossover style vehicle that uses the R2 platform, and the high-performance R3X offering.
"It takes the package of R2 and the platform, it shrinks it, it puts it into our take on what is a crossover," Scaringe said Thursday of the R3.
While reservations are underway for the R2 SUV, Rivian did not announce pricing or delivery estimates Thursday for the R3 or R3X. The company did say the R3 will be at a lower price point than the R2 and that deliveries for the R3X will begin after the R2.
RIVN shares jumped 13.3% to 12.50 during Thursday's stock market action. On Wednesday the stock edged up 0.9%. On Thursday, Jefferies Group initiated coverage of Rivian stock with a buy rating and 16 price target.
The firm wrote that Rivian appears closest to Tesla in "spirit," with its own software stack, strong brand identity, global potential and similar growth pains.
On the Feb. 21 Q4 earnings call, Scaringe said that the "R2 represents the essence of our brand, while targeting the significant midsized SUV segment, a massive market with limited compelling EV options beyond Tesla."
Scaringe added there is a lack of choice of "highly compelling EV products" between $45,000-$55,000.
"We remain very bullish on the R2 segment and the R2 product itself," he added on Feb. 21. "We've engaged with our suppliers to ensure that we can ramp effectively as well as laying out the production road map."
Rivian Stock Falls On Q4 Earnings
Rivian stock has remained near lows after diving more than 25% on Feb. 22 following its fourth-quarter earnings and revenue report. The company at that time also announced layoffs and plans to keep production in 2024 flat compared to 2023.
Rivian reported on Feb. 21 a loss of $1.36 per share in Q4 with sales doubling to $1.31 billion. Wall Street expected a loss of $1.35 and revenue totaling $1.28 billion. Looking to 2024, Rivian said it expects production of 57,000 vehicles, flat with 2023. The EV startup also predicts consumer and commercial vehicle deliveries to grow by low single-digits in 2024.
The carmaker also forecast that vehicle deliveries in Q1 2024 will be about 10%-15% lower than in Q4 2023 and that it is laying off 10% of its salaried workers.
Chief Financial Officer Claire McDonough told investors on the Q4 earnings call that Rivian remains "confident that our cash, cash equivalents and short-term investments can fund our operations through 2025."
"We aim to maintain a strong balance sheet position by continuing to drive cost efficiencies and improve our vehicle unit economics, while opportunistically evaluating a variety of capital markets available to Rivian ranging across the capital structure," McDonough said.
However, the EV startup appears focused on the production of the R2 platform vehicles.
Rivian stock ranks ninth in IBD's Automakers industry group. RIVN has a 22 Composite Rating out of 99. Additionally, the stock has a 7 Relative Strength Rating and its EPS Rating is 41 out of 99.
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