Rivian Stock: Millionaire Maker or Money Pit?

3 Sept 2025 11:32

Key Points

• Rivian’s stock has plummeted 92% since its IPO
• The company is developing cheaper vehicles and expanding manufacturing
• Despite potential upside, Rivian remains an extremely risky investment

I’ve watched Rivian’s spectacular fall from grace with a mix of fascination and horror. Back in 2021, this EV darling commanded a $100+ billion valuation without generating a dime in revenue. Fast forward to today, and shareholders have been absolutely crushed as the stock collapsed 92% from its peak, leaving it with a modest $16 billion market cap.

Yet despite this bloodbath, Rivian stubbornly pushes forward with its premium EV ambitions, building a vertically integrated model and courting partners like Volkswagen for desperately needed capital.

Rivian’s approach mirrors Tesla’s playbook - American manufacturing, direct-to-consumer sales, and proprietary technology. Their Illinois factory currently produces about 50,000 vehicles annually, focusing on expensive R1 trucks and SUVs that only wealthy buyers can afford. To their credit, these vehicles have garnered impressive reviews.

The company’s future hinges on their upcoming R2 SUV, slated for 2026 with a $45,000-$55,000 price tag. This more affordable option could add 155,000 units to their annual capacity. Without this scale, profitability seems impossible.

But let’s be brutally honest about Rivian’s cash hemorrhage. They burned over $6 billion in 2023 alone. Recent cost-cutting has reduced this to “just” $1 billion annually. Their $7.5 billion cash reserve buys time, and partnerships with Volkswagen, a potential $6.6 billion Department of Energy loan, and Amazon’s 15% stake provide lifelines.

Looking ahead, Rivian expects to deliver 40,000-60,000 vehicles this year. Revenue could potentially reach $20 billion once R2 production ramps up. With Americans buying 15-17.5 million vehicles annually and EV adoption growing, Rivian has a theoretical opportunity.

If they hit $20 billion revenue with a 5% profit margin, that’s $1 billion in annual income - giving the stock a P/E of 16 at current prices. That might look cheap for a growth company, but I’m skeptical.

The auto industry is a graveyard of failed companies. Rivian might never turn a profit, especially if the economy tanks. For every Tesla success story, dozens of car companies have gone bankrupt.

I’ve seen too many investors burned by Rivian already. Despite the apparent discount, this remains a speculative bet, not a reliable millionaire-maker. Sometimes cheap stocks are cheap for very good reasons.

Brett Schafer has positions in Amazon.

Disclaimer: For information purposes only. Past performance is not indicative of future results.