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Rivian Automotive manufactures all-electric delivery trucks and vans.
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It is about to expand its reach from the high end to the mass market.
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Rivian has just unveiled a new technology that could be fundamental to its future.
Rivian Automotive (NASDAQ: RIVN) is trying to enter the automotive sector by leveraging new technology to compete and partner with major car manufacturers. That’s a tall order, but if successful, the company could help set investors up for life.
The massive share price gains of Teslaa pioneering electric vehicle (EV), hints at the possibilities. There’s just one problem. This is what it is.
Rivian does three different things right now, all of which are important. The highlight is that it makes a fully electric truck for the consumer market. The vehicles are premium, but at the higher end of the cost spectrum. So there is a fairly limited customer base. That’s not a bad thing, though, because it’s the same approach Tesla used when it started.
The second major business within Rivian is its delivery vehicles, designed for business customers. The big story there has long been the company’s collaboration Amazon. Electric vehicle sales have helped generate revenue as Rivian builds its consumer business and showcases its technology. Rivian now sells its delivery trucks to other commercial customers.
The third business within Rivian focuses on licensing its technology to others car manufacturers. The lead partner is Volkswagen, which has been providing capital to Rivian in exchange for access to the new electric vehicle company’s technology.
Still, while Rivian is following Tesla’s lead in some ways, it has taken a much broader approach to building its business. That’s a good thing, given that Tesla entered the auto industry when there was little to no competition in the electric vehicle niche. Now, all the major car manufacturers and a number of electric vehicle start-ups are competing with each other in the electric vehicle market.
The next significant step for Rivian is the introduction of a mass market truck known as the R2. That vehicle is expected to launch in 2026. With about $7 billion in cash on the balance sheet at the end of the third quarter of 2025, it should have more than enough money to finish the massive capital investment needed to complete the R2 effort.
There’s just one problem: EV sales have weakened as government subsidies have been cut. It is unclear whether the R2 will be as big a success as previously expected. Rivian’s goal is to increase its sales volume so it can spread its costs over more vehicles. If this does not happen to the extent expected, it could be difficult for the company to make a profit selling consumer-oriented vehicles.
