Rivian Automotive (NASDAQ:RIVN) gave bulls plenty to be happy about with its Q1 2025 earnings last week. Not only did the company’s revenues of $1.24 billion beat expectations by $220.17 million, but Rivian also achieved its second consecutive quarter of gross profit.
CEO RJ Scaringe added more reasons for optimism, sharing that the company has been making “significant progress on R2.” Indeed, many believe the R2 – Rivian’s compact SUV, slated for launch in the first half of next year – will provide a further jolt for the company when it comes online.
And yet, all is not sunshine and rainbows for the American EV company.
The impact of the ongoing tariff spat, the future of the $7,500 EV tax credit for consumers, and the status of a $6.6 billion U.S. Department of Energy loan that the company negotiated with the Biden administration for a Georgia manufacturing plant are all unknown, creating a fair amount of ambiguity.
Acknowledging the uncertainty of the global economic situation, Rivian lowered its expected deliveries for 2025 to 40,000 to 46,000, down from the 46,000 to 51,000 EVs it has previously guided for.
Investor Bill Maurer is not thrilled about Rivian’s prospects, noting that the demand for its wares is presenting a worrisome picture.
“Rivian is hoping to sell hundreds of thousands of units of the R2 annually, with help from a new factory in Georgia, but it’s struggling to meet demand for its current products,” explains the investor.
Maurer spotlights decreasing guidance for EV deliveries this year, while also noting that the company’s Q1 deliveries of 8,640 were some 5,000 less than the previous year. In fact, much of the improved gross margins were due to $159 million in regulatory credits that the company received in Q1, points out the investor, and “Rivian is still losing quite a bit of money and burning through cash.”
The investor is also concerned about the potential R2 boost, as the new model’s expected price tag of $45,000 may not have the $7,500 tax credit to offset the cost. The Trump administration could also throw another wrench in the R2 plans by withholding funding for the Georgia manufacturing plant, warns Maurer.
Putting it all together, for Maurer, the large revenue beat is not sufficient to overcome lingering fears over falling demand, an unfriendly administration, and ongoing cash burn.
“I can’t even think about upgrading the name until we see some sort of improvement in the demand picture here,” concludes Maurer, who rates RIVN a Sell. (To watch Maurer’s track record, click here)
Wall Street is not quite as downcast as Maurer, though it is not exactly ecstatic either. With 7 Buy, 14 Hold, and 4 Sell ratings, RIVN has a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $13.80 implies minimal movement over the coming year. (See RIVN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.