Rivian Stock: Can It Replicate Tesla's Success?
After Tesla (TSLA) proved that a start-up electric car company could take on the traditional automakers, Wall Street jumped into action. That was when Rivian (RIVN) came public, to much fanfare. Fast forward a few years to the current day, and Rivian's stock price has fallen some 90% from its all-time highs. Is this a diamond in the rough that could turn you into a millionaire in a Tesla-style success story, or should you have more modest expectations?
Rivian's Significant Achievements
To give credit where credit is due, Rivian has achieved a huge amount of success in a very short period of time. It basically went from an idea -- making electric vehicles (EVs) -- to an operating business with a well-respected EV truck and an EV delivery van used widely by retail powerhouse Amazon (AMZN). This transformation highlights Rivian's operational prowess and innovative approach to the EV market.
Notably, in late 2024, Rivian hit a key milestone, achieving a modest gross profit for the first time. While a gross profit only means that it was able to generate more revenue from selling its vehicles than it cost to produce them, that is a crucial step toward achieving sustained profitability and positive earnings.
The modest gross profit came after Rivian hit another important goal: scaled production. It delivered more than 10,000 vehicles in the second quarter of 2025, demonstrating a significant increase in its manufacturing capabilities. The upcoming R2 truck, geared towards the mass market, is poised to further increase volume, potentially leading to greater economies of scale.
In many ways, Rivian is attempting to emulate Tesla's trajectory. However, the landscape has shifted, and Rivian faces unique challenges that Tesla didn't encounter. While the potential for growth exists, investors should approach Rivian with a balanced perspective, acknowledging both its strengths and the hurdles it must overcome.
The Road Ahead for Rivian
With a well-respected product and key partnerships with tech giant Amazon and automaker Volkswagen (which has committed to providing fresh capital to Rivian based on Rivian's ability to meet certain business goals), Rivian appears to be on a path to establishing itself as a sustainably profitable business. However, achieving this goal is likely still a few years away, given the ongoing need for investment in business operations and research and development. While Rivian could contribute to building a seven-figure net worth over the long term, rapid millionaire status is unlikely.
Moreover, the competitive landscape is far more crowded than when Tesla entered the EV market. Today, numerous established EV manufacturers and virtually all traditional automakers are investing heavily in electric vehicles. This intensified competition means that even if Rivian executes well, its profit margins may be modest compared to Tesla's earlier successes.
That said, even achieving modest profitability will require flawless execution. While Rivian has largely met its goals so far, there's no guarantee that it will continue to do so. Any significant setbacks could trigger a negative investor reaction.
Considering the stock's significant decline from its peak, it's important to remember that further drawdowns are possible. Recent gains suggest some positive sentiment, but investors should remain cautious and avoid over-optimism.
Rivian: A High-Risk, High-Reward Opportunity?
Betting your entire financial future on Rivian would be ill-advised. However, the company's achievements and future potential are undeniable. The key risk lies in its ability to execute its plans and maintain its competitive edge. If you believe in Rivian's vision and are comfortable with significant risk, including it in a well-diversified portfolio could potentially contribute to long-term wealth accumulation. However, this should be viewed as a long-term, speculative investment.
More conservative investors may prefer to remain on the sidelines for now. Waiting for the launch and market reception of the R2 model would provide valuable insights into Rivian's ability to compete in the mass market and solidify its position in the EV industry.
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