After six months of all pain and hardly any gains, Rivian Automotive (NASDAQ:RIVN) stock is suddenly racing toward higher prices. What’s going on, and can the rally continue? I am bullish on RIVN stock and, in light of recent developments, expect Rivian to impress investors over the next several years.
California-based Rivian Automotive manufactures and sells electric vehicles (EVs). Rivian’s vehicles are known for being sleek and eye-catching but also powerful.
As we’ll discover, analysts haven’t set very high price targets on Rivian stock yet. However, they’ll probably revise their price targets higher soon since Rivian stock is now shifting into a higher gear.
Rivian Automotive Pauses Mega-Factory Construction
You may have heard about Tesla’s (NASDAQ:TSLA) “giga-factory.” Yet, Tesla isn’t the only EV manufacturer that can build a huge automotive production plant. Rivian also has plans to build a mega-sized EV factory. However, Rivian just announced that it’s putting those plans on hold.
Isn’t this bad news, and why has RIVN stock rallied during the past few days? Actually, it’s good news that Rivian is pausing the construction of its Georgia-based EV manufacturing plant. Indeed, many of Rivian’s shareholders are probably relieved about this.
Rivian plans to roll out a new EV model – but more on this development in a moment. For now, we just need to know that Rivian Automotive CEO RJ Scaringe wants to produce this vehicle model at Rivian’s already-existing facility in Illinois.
Consequently, Rivian should be able to get its new EV model into production sooner. Just as importantly, Rivian Automotive expects to save $2.25 billion in capital spending by pausing the construction of its Georgia-based vehicle manufacturing plant.
Don’t get the wrong idea. Scaringe emphasized, “Our Georgia site remains really important to us.” Thus, it’s clear that Rivian Automotive isn’t just giving up on this EV manufacturing plant. Unfortunately, Rivian didn’t release a specific time frame for the construction of its production facility in Georgia. So, stay tuned as hopefully, the company will soon provide further details on this.
Rivian Announces Three New Vehicle Models
Why would Rivian Automotive want to build the Georgia production factory in the first place? The company already has one in Illinois. Yet, Rivian will eventually need to ramp up its production pace, especially since the automaker expects to introduce three new EV models.
That’s right—Rivian Automotive announced three new vehicle models. These are the R2, a midsize SUV; the R3, a midsize crossover EV; and the R3X, a “performance variant” of the R3 (I assume this means sportier and more powerful).
Hence, Rivian Automotive will probably need to resume the construction of its Georgia factory at some point just to accommodate these new vehicle models. Scaringe emphasized that the Georgia production plant will be “core to the scaling across all these vehicles, between R2, R3 and R3X.”
These three EV models will all be designed around Rivian Automotive’s “new midsize platform,” which “consolidates and eliminates parts thanks to intelligent design.” Rivian expects to commence production of the R2 in the “first half of 2026.” Investors shouldn’t worry too much about Rivian running out of money prior to that since the company assures that it has cash, cash equivalents, and short-term investments that are “expected to be sufficient to fund operations through the start of R2 production.”
It certainly sounds like Rivian Automotive is making a big deal out of the upcoming R2 vehicle model. This really is a big deal, though, and not just hype. The Wall Street Journal even said about Rivian’s R2 announcement that the automaker is having a “Model 3 [m]oment.”
What does this mean? Naturally, it’s a reference to Tesla’s Model 3, which is the company’s popular and comparatively affordable EV model. It’s fair to say that the Model 3 helped Tesla stay competitive in the increasingly crowded EV space.
Rivian Automotive’s R2 vehicle model will be priced starting at $45,000, which is reasonable when compared to many other EVs. Truly, Rivian is having its Model 3 moment with the R2 – or at least, that moment will probably happen in 2026, when Rivian expects to start producing these affordably priced vehicles.
Is RIVN Stock a Buy, According to Analysts?
On TipRanks, RIVN comes in as a Moderate Buy based on 11 Buys, nine Holds, and three Sell ratings assigned by analysts in the past three months. The average RIVN stock price target is $17.48, implying 36.8% upside potential.
Conclusion: Should You Consider RIVN Stock?
Soon, analysts might re-evaluate Rivian Automotive and start lifting their ratings and price targets. They can’t ignore Rivian’s upcoming vehicle models, especially the R2, with its eye-catching starting price.
Furthermore, analysts and investors should certainly acknowledge the wisdom of Rivian pausing the construction of its Georgia-based manufacturing facility, which should help the company save money. With all of that in mind, it makes sense that RIVN stock is rebounding, and I am definitely considering a share position today.
