Rivian's R2 launch offers investors hope in bleak EV market

"After a brutal year for the US electric-vehicle industry, Rivian Automotive Inc. handed investors a rare reason for optimism. The EV manufacturer reported better-than-expected fourth-quarter results and its first-ever annual gross profit, a key milestone after years of consistent losses. The signs of progress come as the company prepares to begin selling its R2 midsize SUV, a lower-priced EV that Rivian hopes will appeal to a broader swath of car buyers."

"For the stock itself, nothing matters more than a timely launch for the R2 SUV, Alexander Potter, an analyst with Piper Sandler, said in a note. In this regard, Rivian remains essentially on track. Share rose as much as 28% in New York Friday. If that holds, it would nearly erase the year-to-date loss of 29% through Thursday's close. The fourth-quarter results also marked a rare bright spot in an otherwise bleak US electric vehicle industry."

"Sales have been in a tailspin since a $7,500 US tax credit for EV buyers expired in late September, fueling questions about what true demand for battery-powered cars will be without those subsidies. The business of producing EVs grew even harder still in other ways. Republican-led moves to unwind EV-friendly US policies essentially killed demand for regulatory credits a source of hundreds of millions of dollars in annual revenue for EV makers Rivian and Tesla Inc."

Rivian delivered stronger-than-expected fourth-quarter results, reporting an adjusted loss of 54 cents a share versus a 69-cent deficit expected by Wall Street and revenue of $1.29 billion. Fourth-quarter gross profit was $120 million, enabling the company to post its first full-year gross profit after a $1.2 billion loss in 2024. Shares jumped as much as 28%, nearly offsetting a 29% year-to-date decline. The company is preparing to begin sales of the lower-priced R2 midsize SUV, with a timely launch viewed as critical. The broader US EV market faces demand pressure after a $7,500 tax-credit expiration and the loss of regulatory-credit revenue.

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