Where Will Rivian Stock Be in 1 Year?

Will Ebiefung, The Motley Fool

Sun, Apr 27, 2025, 9:23 AM 5 min read

Electric vehicle (EV) maker Rivian (NASDAQ: RIVN) has proven to be a painful investment for most people who have owned the stock: Its shares today trade 93% below the all-time high of around $172 they hit in November 2021, just days after the company went public. To be fair, however, the stock was relatively overvalued at the time. And some investors may be looking at its now much cheaper valuation as an opportunity.

The next 12 months will present significant opportunities for Rivian as it rolls out its new R2 SUV and R3 crossover models. The arrival of those lower-priced mass-market EVs will expand its ability to capture some market share from embattled EV powerhouse Tesla. But will the company ever be able to staunch its relentless outflows of cash?

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2025 has been a tumultuous year for the automotive industry and the U.S. economy as a whole. So far, one of the biggest losers has been Tesla, which saw its first-quarter deliveries drop 13% year over year, due in large part to backlash against the actions of CEO Elon Musk in Washington. Rivian can capitalize on Tesla's damaged brand to win over consumers who still want to buy an electric vehicle, but don't want to put money in Musk's pocket.

Rivian may also benefit from the 25% tariffs on vehicles and auto parts imports imposed by President Donald Trump, as well as his wider tariff platform. The EV maker boasts a highly U.S.-centric supply chain -- its motors and batteries are built domestically, and all its vehicles are assembled in Normal, Illinois. This gives the company an advantage over rivals like Ford Motor, which manufactures the electric Mustang Mach-E crossover in Mexico.

That said, Rivian won't be entirely immune to tariff-related fallout. Like all automakers, it relies on a complex international supply chain for sourcing electronic components and core materials such as steel and aluminum, which now face significantly higher import taxes. This could erode gross margins across the U.S. auto industry. And as a small and still unprofitable company, Rivian will be less able to absorb those higher costs than its larger rivals.

Rivian's fourth-quarter results were a mixed bag. The good news was that total revenue jumped 32% year over year to $1.73 billion, driven by a spike in sales. Its operating losses dropped 58% to $661 million. While that was still a massive loss for a company of Rivian's size, things are moving in the right direction, and it now has a pathway to profitability and positive cash flow if it can continue scaling up its business model while keeping costs under control.