Rivian Faces Threats from Economic Slowdown
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy RIVN?
Source: Fool
- Economic Slowdown Risk: The OECD estimates inflation will reach 4.2% this year, significantly higher than the previous 2.6% forecast, which could stem from the ongoing war with Iran, potentially impacting Rivian's sales if the situation worsens.
- Rising Layoff Trends: Layoffs exceeded 21 million in 2025, up from 20.1 million in 2024 and 19.8 million in 2023, indicating a weakening job market that may reduce consumer purchasing power, thereby affecting demand for Rivian's vehicles.
- R2 Model Launch Challenges: Rivian's R2 model is priced at approximately $58,000, with plans to release cheaper versions, yet EV sales have dropped 28% in Q1 2023, posing significant challenges to the R2's success.
- Car Payment Pressures: The average monthly car payment is now $772, with one-third of car buyers underwater, meaning they owe more than their vehicle's worth, which could further suppress demand for Rivian's new models and impact market performance.
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Analyst Views on RIVN
Wall Street analysts forecast RIVN stock price to rise
18 Analyst Rating
8 Buy
7 Hold
3 Sell
Moderate Buy
Current: 15.990
Low
10.00
Averages
17.78
High
25.00
Current: 15.990
Low
10.00
Averages
17.78
High
25.00
About RIVN
Rivian Automotive, Inc. is an automotive technology company, which is engaged in developing and manufacturing category-defining electric vehicles (EVs) as well as vertically integrated technologies and services. The Company's R1 platform consists of two vehicles: the R1T, a two-row five-passenger pickup truck, and the R1S, a three-row seven-passenger sport utility vehicle (SUV). In the commercial market, the Company offers a Rivian Commercial Vehicle (RCV) platform. The vehicle on this platform is the Electric Delivery Van (EDV), designed and engineered by Rivian in collaboration with Amazon. The Company also offers FleetOS, its proprietary, end-to-end centralized fleet management subscription platform. It also offers a variety of services, including vehicle repair and maintenance, financing, insurance, joint venture, software subscriptions, and vehicle accessories, among others. Its other services include vehicle electrical architecture and software development services, and more.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- AST SpaceMobile Outlook: AST SpaceMobile plans to launch 45 to 60 satellites by the end of 2026, with revenue expected to grow from $71 million in 2025 to $1.92 billion by 2028, indicating strong market demand and profitability potential.
- Rivian Market Expansion: Rivian anticipates that its new R2 SUV will significantly lower market entry barriers, with revenue projected to increase from $5.4 billion in 2025 to $16.4 billion by 2028, showcasing substantial long-term growth potential despite short-term challenges.
- QuantumScape Technological Breakthrough: QuantumScape's solid-state lithium-metal batteries are expected to commercialize by 2026, with revenue forecasted to rise from less than $1 million in 2026 to $545 million by 2028, indicating a promising long-term outlook despite near-term profitability challenges.
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See More
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- Satellite Constellation Expansion: AST SpaceMobile plans to deploy 45 to 60 satellites by the end of 2026, ultimately aiming for over 240, which will significantly enhance its competitive edge in the global communications market, particularly in rural network coverage.
- Revenue Growth Expectations: Analysts forecast AST's revenue will rise from $71 million in 2025 to $1.92 billion by 2028, with profitability expected in 2027 and 2028 as customer numbers and satellite launches increase, indicating strong market potential.
- Impact of Rivian's New Model: Rivian's R2 SUV, priced $30,000 to $40,000 lower than its flagship R1 models, is expected to significantly broaden its market reach, with analysts predicting revenue growth from $5.4 billion to $16.4 billion between 2025 and 2028, despite facing near-term challenges.
- QuantumScape Battery Outlook: QuantumScape's solid-state batteries are projected to increase revenue from under $1 million in 2026 to $545 million by 2028; while not yet profitable, its partnership with Volkswagen will aid in commercializing its technology, suggesting a bright future ahead.
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- Stock Rebound Potential: Rivian's shares have risen by 32% over the past year, and despite significant losses since its IPO, successful execution of its five-year strategy could sustain this momentum, potentially rewarding investors.
- New Model Launch: Rivian plans to introduce the R2 model in 2025 as a direct competitor to Tesla's Model Y, with customer deliveries expected to start in Q2; the lower starting price could attract more customers and significantly boost sales growth.
- Partnership with Uber: Rivian has signed a deal with Uber to supply 10,000 fully autonomous R2 models starting in 2028, with an option for an additional 40,000 by 2030, which could bring up to $1.25 billion in investment, enhancing its market position.
- Autonomous Driving Goals: Rivian aims to achieve level 4 autonomy, which would greatly enhance its competitiveness if accomplished before Tesla; however, failure to meet this deadline could negatively impact its stock price and increase investment risks.
See More
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- Strategic Shift: Uber has announced a commitment of over $10 billion to acquire thousands of autonomous vehicles, marking a significant transition from its 'asset-light' model to owning a fleet, aimed at countering threats from competitors like Waymo and Tesla.
- Market Response: This move not only surpasses last year's $9.8 billion in free cash flow but also demonstrates Uber's determination in the autonomous driving sector, with plans to launch robotaxi services in 15 cities, further solidifying its market position.
- Partnerships: Uber's investment will involve collaborations with companies like Lucid, Rivian, and China's Baidu, aiming to ensure supply chain stability and enhance its competitiveness in the autonomous driving market.
- Financial Pressure: While this investment may increase financial burdens, analysts view it as a necessary step for Uber to adapt to market changes and achieve long-term growth, especially in competition with giants like Amazon and Alphabet.
See More
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- IPO Filing: SpaceX submitted its IPO paperwork to the SEC in early April, marking a significant step towards public market entry, although financial statements remain confidential.
- Profit and Loss Discrepancy: While Reuters reported an $8 billion profit on $16 billion revenue for 2025, The Information indicated a $5 billion loss on $18 billion revenue, creating uncertainty that could affect investor confidence.
- Valuation Target and Market Impact: Seeking a $1.75 trillion valuation for its IPO, SpaceX could become the largest IPO in history and quickly rank among the top ten public companies globally; however, historical data suggests that large IPO stocks often underperform in the long term.
- Cautious Investor Sentiment: Although SpaceX shares may surge on their first trading day, historical trends indicate that many large IPOs perform poorly in the following year, leading investors to adopt a wait-and-see approach for better buying opportunities.
See More
SpaceX Plans Historic IPO with $1.75 Trillion Valuation
- IPO Roadshow Scheduled: SpaceX is set to host its IPO roadshow in early June, aiming for a summer listing that could establish it as the largest IPO in history with an initial valuation of $1.75 trillion, reflecting the company's strong confidence in capital markets.
- Financial Performance Discrepancies: While SpaceX reported $16 billion in revenue and an $8 billion profit for 2025, conflicting financial data from different sources indicates uncertainty in profitability, which may affect investor confidence.
- Historical Performance Warning: Historical data shows that stocks with large IPO valuations typically perform poorly post-listing, with average returns of -13% over three months and -12% over one year, potentially leading prospective investors to adopt a cautious stance on SpaceX's long-term performance.
- Market Reaction Expectations: Although SpaceX's IPO is highly anticipated and may see a surge in stock price on its debut, the historically low long-term returns of large IPO stocks suggest that investors should remain on the sidelines and look for optimal buying opportunities amid market fluctuations.
See More
