Rivian Stock Plunges Over 88% From IPO Peak, Sparking Investor Concerns

Electric vehicle manufacturer Rivian Automotive (NASDAQ: RIVN) has seen its stock price plummet more than 88% from its initial public offering (IPO) highs, leading to significant investor apprehension. This sharp decline has prompted discussions among investors about the company's long-term viability and its comparison to early-stage Tesla investments. One social media user, Chris, recently encapsulated this sentiment, stating, > "Imagine pouring your life savings into Rivian because you didn’t want to miss out on a “Tesla” play."

Rivian, known for its R1T pickup, R1S SUV, and commercial delivery vans, has faced a challenging market since its 2021 IPO. While once trading around $180, the stock now hovers in the $13-$15 range, reflecting the intense competition and high capital demands of the EV sector. The company reported a net loss of $4.75 billion in 2024, following a $5.43 billion loss in 2023, despite increasing revenues to $4.97 billion in 2024.

However, Rivian has shown some operational improvements, reporting a positive gross profit of $170 million in the fourth quarter of 2024. This was primarily driven by cost efficiencies, including a reduction of $31,000 in automotive cost of goods sold per vehicle compared to the previous year. The company aims for modest gross profit for the full year 2025 as it continues to scale production and reduce costs.

Strategically, Rivian has secured significant partnerships and funding, including a joint venture with Volkswagen Group valued at up to $5.8 billion for electrical architecture and software development. Additionally, the company finalized a loan agreement of up to $6.6 billion with the U.S. Department of Energy to support its new Georgia manufacturing facility, which will produce the more affordable R2 model. Rivian produced 49,476 vehicles and delivered 51,579 in 2024, demonstrating progress in scaling its operations.

Despite these efforts, concerns persist regarding Rivian's cash burn rate and the highly competitive EV landscape. Analysts remain mixed on the stock's future, with some bullish on its long-term potential due to product strength and strategic moves, while others highlight the significant financial hurdles and the increasing number of competitors. The path to sustained profitability and market leadership remains a critical challenge for the Irvine, California-based automaker.