Rivian Down 85%

"The case for Rivian to remain in business, at least as a standalone company, is grim. It competes in a US EV market that is exceedingly crowded, and in which sector sales growth is likely to be tough. First, there is Tesla ( NASDAQ: TSLA), which holds a 48% market share. That is down from a peak of 80% but is still formidable. The market share of GM ( NYSE: GM), Ford ( NYSE: F), and Hyundai/Kia is approaching 10%."

"The only thing that is helping the stock is a deal with VW. It could be worth $5.8 billion. On the other hand, there are hurdles. It certainly is not something investors can count on. It is for the joint development of the product and software. But VW isn't making any big promises. All the other Rivian news is bad. It has just recalled 24,214 vehicles because of problems with its self-driving system."

Rivian shares plunged just over 85% in five years while the S&P 500 gained over 40%. A potential $5.8 billion joint development deal with VW offers limited upside and carries uncertainties. A recent recall of 24,214 vehicles over self-driving system problems raises quality concerns given low production volume. Fierce competition from Tesla, GM, Ford, and Hyundai/Kia and the loss of a $7,500 federal tax credit threaten sales growth. Rivian's models start around $76,990, narrowing the addressable market. The company lost $1.1 billion on $1.3 billion revenue while producing 5,979 vehicles in the quarter, undermining standalone prospects.

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