Gary Black
Co-Founder & Portfolio Manager of The Future Fund
Rivian's move from its $80K R1 into a $45K mid-priced SUV is the best brand-leverage opportunity right now and could significantly expand its addressable market. Rivian built its brand for quality and reliability on the R1 and R1T, much as Tesla established Models S and X before Model 3 and Y took off in 2017-2019. The risk is that going downmarket stretches the brand too far or drives premium customers away. x.com x.comÂ
Rivian's Q2 shows early adoption of its lower-priced R2 SUV, launched in June at $45K versus $80K for the R1. Revenue of $1.66B beat the $1.52B expected, gross margin was 11.0% versus 6.54% expected and the EBITDA loss of $379M beat the expected $548M; full-year EBITDA guidance rose $50M while capex guidance fell. CEO RJ Scaringe laid out an autonomy path from hands-off L2+ in 2026 to eyes-off L3 in 2027 and no driver in the car (L4) in 2028. x.comÂ
Rivian is positioned to be second only to Tesla in consumer autonomy, and R2 deliveries have finally begun. Self-driving is becoming real for those with the data and compute, Uber recently struck a deal with Rivian, and no automaker outside Tesla and Rivian has vertically integrated as far. It won't be a profitable machine soon, but the coming quarters will show whether R2 has its Model 3/Y moment, and after an 18% drop on dilution news a $20 billion valuation looks worth holding. x.comÂ
Rivian's outlook now depends on R2 adoption, after another offering of about 6.3% dilution that adds roughly $1.4 billion to its coffers. Rivian also pre-announced a Q2 revenue beat alongside the offering. x.com x.comÂ
Rivian's appeal depends on full self-driving, and its premium R1S is not targeted for FSD, which makes premium EV pricing hard to justify. CEO RJ Scaringe is smartly aiming FSD at the mass-market R2. The stock could take off, but only if a semi-capable FSD arrives on the R2 rather than on the strength of the vehicle itself. x.comÂ
Tesla's distraction with merging with SpaceX makes Rivian a great buy here. x.comÂ
Rivian trades well below newly raised analyst targets after lifting its 2026 delivery outlook. Full-year guidance is now 65,000-70,000 vehicles, more than 30% growth, as R2 SUV deliveries began and the model drew a record 57,000 demo drives. Piper Sandler upgraded to $20, Deutsche Bank moved to $24 and TD Cowen raised to $21, against a $16.97 share price. R2 Premium arrives in late 2026, with the standard trim following in 2027. x.comÂ
Rivian's R2 is going to flop, because once a carmaker goes low cost it is game over. Rivian is burning massive cash while the auto market weakens fast on rates and inflation, and its $21B market cap should be closer to Lucid's. x.comÂ
Rivian's weekly upside case rests on aggressive call buying. Its October 30 $12 calls showed about 5,230 contracts filled at the ask in one burst, with $282,200 in premium. x.comÂ
Rivian's Q3 results appear to have crushed expectations, adding a record revenue quarter to its growth case. At first glance, revenue was $2.16B versus $2B estimated, and the loss was $0.48 per share versus $0.74 estimated. x.comÂ
Rivian's survival depends on demand it probably lacks: it must sell out full capacity at Normal and ramp Georgia, roughly 8x R1 sales, and 400,000-plus units a year of demand looks doubtful. EV demand is down and competition is up in 2026, while the significantly cheaper Model Y sold 357,000 units in the US. The R1 backlog was also cited as proof of high demand in 2021; time will tell. x.com x.comÂ
Rivian is now the pure EV play. Its deliveries rose 30%, and new models plus continuing tech improvements are on the way. x.comÂ
