Rivian

Oct. 23 (UPI) — All-electric vehicle maker Rivian Automotive has announced it is laying off 4.5% of its workforce amid mounting market pressures, the company said Thursday.

In a memo sent to employees, company founder and CEO RJ Scaringe said the cuts involve restructuring of its marketing, vehicle operations, sales and delivery and mobile teams, according to CNBC.

“These were not changes that were made lightly,” Scaringe said in the memo. “With the changing operating backdrop, we had to rethink how we are scaling out go-to-market- functions. The news is challenging to hear, and the hard work and contributions of the team members who are leaving are greatly appreciated.”

Rivian ended 2024 with just under 15,000 employees.

Scarigne’s memo did not say exactly how many employees would be let go, but according to The Wall Street Journal, which first reported the plan, the layoffs would affect more than 600 employees.

Rivian and other elective vehicle makers are facing difficult sales and marketing conditions following the end of a $7,500 dollar tax credit for EV purchases in the new federal budget.

Demand has also been lower than expected for Rivian amid regulatory issues. The automaker also lacks new products until next year and faces a cash shortage. It lost $1.1 billion during the second quarter.

This is the latest in a series of layoffs. Rivian furloughed between 100 and 150 workers in its commercial and manufacturing teams between September 2024 and June.

Rivian is scheduled to release at least 150,000 R2 SUVs in 2026, which will be more widely available to consumers than previous models.

The company also recently started construction on its third manufacturing facility outside of Atlanta, where it plans to build the R2 and other models.

The company has struggled to maintain a sales pace with its current lineup of vehicles. Its sales are projected to drop by 16% in 2025 compared to last year.

Rivian (RIVN -1.10%) is gearing up for its launch of a new electric vehicle model next year, and is coming off a year in which it met gross profit milestones that unlocked additional funding from its partnership with Volkswagen.

That’s the good news.

The bad news is that Rivian narrowed its vehicle delivery guidance for the year, the electric vehicle industry just had its federal tax credits axed, and the company reported a gross loss again in the most recent quarter.

To say Rivian’s challenges are increasing would be an understatement. Here’s why Rivian stock likely won’t make you a millionaire anytime soon.

Image source: Rivian.

Rivian’s slow but steady progress

They say it’s always best to start with the good news, so here’s what Rivian has going for it right now, starting with the company’s upcoming cheaper models. Rivian will begin selling its smaller R2 SUV next year and R3 crossover in 2027. The former will start at just $45,000 while the latter has an estimated price tag of around $40,000.

Those are important price points because they’re below the average price of a new EV, which is currently around $57,000. Potential EV buyers often cite cost as a concern when considering an electric vehicle, and for EVs to gain ground in the market, their prices need to come down. You can’t buy a new Rivian vehicle for less than $71,000 right now, so the upcoming lower-priced models could potentially spark interest among more budget-conscious buyers.

What’s more, Rivian has proved that it can run an efficient EV business after reporting two consecutive quarters of positive gross profit. Management set a goal to achieve that, and it did so, in part, by retooling and reengineering its manufacturing process last year — cutting up to 35% in material costs for some vehicles. Achieving that goal also unlocked $1 billion in additional funding from its partner, Volkswagen, which was another win for Rivian.

Unfortunately, even after notching these wins, Rivian is still in uncharted territory.

The road to success is long, winding, and uncertain

Despite Rivian’s successes and its pipeline of new models, the company is facing an arduous path. First, the federal government ending the EV tax credits is a blow to the industry. Rivian’s vehicles didn’t qualify for the credit because they’re too expensive, but the company was able to take advantage of a leasing loophole that helped lower costs for some customers.

Making matters worse for Rivian is that after two consecutive quarters of positive gross profit, the company slipped back into the red in the second quarter. That may not have been such a big deal if everything else was humming along for the company, but it came just ahead of Rivian’s management narrowing its full-year vehicle guidance.

Rivian now expects deliveries between 41,500 to 43,500 — lower than its previous midpoint guidance by about 500 vehicles. That’s the company’s second revision this year. When Rivian started its production year, it first estimated deliveries of up to 51,000.

What’s especially disappointing is that deliveries for Q3 were actually up by 32% from the year-ago quarter, but the company’s revised full-year delivery guidance was adjusted down, likely due to the federal tax incentives being eliminated and tariff uncertainty. While some of the delivery increases were likely due to customers signing up for leases before the tax credits expired, there’s no getting around the fact that the current 2025 estimates are nearly 18% lower than 2024’s deliveries.

Is Rivian a millionaire maker?

For the reasons listed above, I don’t think Rivian stock is a millionaire maker. I have a small position in Rivian, and I’m willing to wait out this rough patch to see what happens with the company, but expecting Rivian stock to mint millionaires doesn’t look like a good bet.

That doesn’t mean Rivian isn’t a good company or won’t be a good long-term investment, but investors should know that the EV industry is facing significant headwinds and Rivian will likely face more hurdles ahead as it tries to build its EV future.

Rivian Automotive (RIVN 0.85%) is expected to announce earnings in early November. If you’ve been eyeing this electric vehicle stock, now may be a key moment to buy it at a discount. That’s because Rivian is about to reach an important growth catalyst. This will perhaps be the biggest in its history. Let’s learn what that is and whether now it a good time to invest in the EV maker. 

Expect important updates to arrive in early November

What exactly should investors expect to be revealed next month? Most importantly, we should get our clearest update yet on Rivian’s upcoming affordable models: The R2, R3, and R3X.

I’ve written before how important it is for an electric car company to introduce affordable models. A big majority of car buyers are looking to spend less than $50,000 on their next vehicle purchase. And now that U.S. federal tax credits have been eliminated for EV purchases, offering low-cost models is more important than ever.

Right now, Rivian has just two models on the market, both of which can easily cost $100,000 or more with certain options. This high price point dramatically reduces the company’s total addressable market. But the upcoming models — the R2, R3, and R3X — are all expected to cost less than $50,000, making Rivians accessible to tens of millions of new buyers.

When Tesla introduced its affordable models — the Model 3 and Model Y — growth exploded. I expect the same to occur for Rivian. That’s great news for investors, since Rivian’s revenue growth rates have essentially flatlined over the last 18 months. This has caused the company’s price-to-sales ratio to fall to just 3.1. Tesla, for comparison, trades at nearly 17 times sales. If Rivian’s new models follow the growth trajectory of Tesla’s affordable models, this valuation gap could narrow quickly.

Earlier this year, Rivian management reaffirmed that the R2 would begin production in early 2026 as planned. That was an important update, since the EV manufacturing industry has historically been overly optimistic about production timelines. Last week, hundreds of Rivian R2 test vehicles were spotted on public roads, with the company noting that these vehicles were generating real-world data and validating charging capabilities ahead of launch.

It’s possible that the Rivian R2 will begin production before the first earnings announcement of 2026, which should occur sometime next February. If so, that means this upcoming announcement in November could generate clear guidance from management that adds momentum to the stock. But there’s one other reason to buy ahead of next month’s earnings call.

Image source: Getty Images.

Can Rivian stay profitable without key subsidies?

Unlike Tesla, Rivian has yet to achieve net profitability. But this year, the company did achieve positive gross margins for the first time. This signaled to the market that, long term, the company is capable of producing vehicles at a profit. There’s just one problem. A lot of this gross profit was realized through selling automotive regulatory credits — credits earned from the U.S. government for producing low-emissions vehicles that can essentially be sold at a 100% profit.

In May, for example, Rivian posted a $206 million gross profit. Roughly half of that gross profit, however, included regulatory credit sales. With those credits eliminated for 2026, it will be very interesting to track Rivian’s gross profit levels. In August, the company slipped back into negative gross profits.

It’s possible that good news on the R2 production front will be offset by a negative update regarding profitability. But if we get positive news on both factors, we could finally see Rivian shares move significantly higher following more than two years of share price stagnation.

When a new president enters office, it’s not uncommon for changes to take place, either through the signing of bills into law or via executive orders. Since President Donald Trump was inaugurated a little over eight months ago, we’ve witnessed a slew of adjustments made to Social Security, as well as the passage of his flagship tax and spending law, the “Big, Beautiful Bill.”

While Trump’s big, beautiful bill introduced a number of tax breaks for select groups, including a higher standard tax deduction for eligible seniors from 2025 through 2028, and partial deductions for tips and overtime pay for eligible workers during the same four-year timeline, it also removed some important benefits.

President Trump delivering his State of the Union address. Image source: Official White House Photo.

Specifically, Donald Trump’s law changes the fortunes of the electric-vehicle (EV) industry and its leading pure-play manufacturers, which includes Tesla (TSLA 0.61%), Rivian Automotive (RIVN -2.15%), and Lucid Group (LCID 0.56%), as of today, Sept. 30.

EV makers bid adieu to an important dangling carrot

Among the laundry list of tax and credit adjustments in the president’s big, beautiful bill is a newly shortened timeline that ends the $7,500 tax credit consumers received when purchasing a qualifying new EV or plug-in hybrid, as well as the $4,000 credit when buying a used EV. This EV credit was available to new vans, SUVs, and trucks priced below a manufacturer’s suggested retail price (MSRP) of $80,000, as well as new sedans with an MSRP of no more than $55,000.

Though this credit (officially known as the Clean Vehicle Credit) was initially slated to end in 2032, based on the Inflation Reduction Act, Donald Trump’s big, beautiful bill brings this new EV purchase credit to an end today, Sept. 30. Qualifying new vehicles purchased after today will no longer be eligible for the $7,500 credit.

This EV credit applied to a significant percentage of the vehicles Tesla sells, including its Model 3 Sedan, all-wheel drive Model X SUV, single and dual motor Cybertruck, and multiple variants of the Model Y SUV. While Rivian’s and Lucid’s EVs are generally priced above the MSRP range where tax credits end, both companies had been angling leases of upcoming models as a way to take advantage of the $7,500 EV credit.

This EV credit was akin to a dangling carrot that allowed pure-play electric-vehicle manufacturers to be more price-competitive with internal combustion engine (ICE) vehicles. Undercutting traditional ICE vehicles on price is viewed as a borderline necessity with EV charging infrastructure still somewhat lacking on a nationwide basis.

Without this upfront cost advantage, it’s likely that future buyers will opt for traditional gas- and diesel-powered vehicles due to the availability of ICE fueling infrastructure and opportunity cost. Whereas it takes just a few minutes to refuel an ICE vehicle, it can take an hour to a full day, depending on the type of charger used, to juice up an EV.

Image source: Tesla.

But wait — there’s more bad news

However, ending this lucrative tax credit that incentivized the purchase of EVs isn’t the only way Donald Trump’s big, beautiful bill is disrupting pure-play EV manufacturers.

When the president signed his flagship tax and spending bill into law on July 4, 2025, it put an end to corporate average fuel economy (CAFE) fines, as well as retroactively eliminated fines for 2022 model years and all subsequent years.

CAFE regulations represent the standard of how far vehicles must travel on a gallon of fuel. These figures, which are set by the National Highway Traffic and Safety Administration, are designed to promote more fuel-efficient vehicles over time and lessen the reliance on fossil fuels. Automakers that failed to meet these standards were subject to fines. With CAFE civil penalties removed, courtesy of Trump’s law, there’s no longer any financial incentive for automakers to meet sky-high mile-per-gallon targets.

This is almost certain to have an adverse impact on the ability of Tesla, Rivian Automotive, and Lucid Group to generate profits.

Government agencies provide automotive regulatory credits to these pure-play EV manufacturers, which sell these tax credits to legacy automakers that are short of compliance targets. For Tesla especially, selling these tax credits plays a key role in its profitability. Without regulatory credits, Elon Musk’s company would have reported a pre-tax loss during the first quarter of 2025.

With the teeth behind CAFE regulations removed by the big, beautiful bill, the market for automotive regulatory credits in the U.S. is going to be severely depressed. It has the potential to expose the fact that Wall Street’s EV darling, Tesla, has been consistently generating more than half of its pre-tax income from unsustainable and/or non-innovative sources, such as selling automotive regulatory credits and earning interest income on its cash.

It’ll also minimize regulatory tax credit revenue for Rivian and Lucid. Whereas Tesla has at least been profitable on a recurring basis for five consecutive years (with the help of automotive regulatory credits), Rivian and Lucid continue to lose money hand over fist as they ramp up operations and attempt to carve out their own unique niches in the automotive marketplace. Despite substantial cash piles for both companies and brand-name financial backing, long-term success is far from a guarantee.

Though I wouldn’t go so far as to say Donald Trump drove a dagger through the heart of the EV industry, his actions are almost certain to thin the herd and make it considerably more difficult for pure-play electric-vehicle makers to compete with traditional ICE vehicles.

After Tesla (TSLA -4.29%) proved that a start-up electric car company could take on the traditional automakers, Wall Street jumped into action. That was when Rivian (RIVN -0.44%) 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 has done big things

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 -0.84%). That isn’t something that could have been achieved if Rivian didn’t have its act together.

Image source: Rivian.

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 key step toward 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, which is a substantial number. It also has a new truck called the R2 coming out next year, which will be geared to the mass market. That should help to further increase volume, which will allow Rivian to spread its costs over even more vehicles.

In many ways, Rivian is following in Tesla’s footsteps. Given the massive stock price advance Tesla has made over its history, some investors might see Rivian as a second chance to catch a little of the Tesla opportunity they might have missed. Don’t get overly excited.

Rivian has a long way to go

With a well-respected product and key partners like tech giant Amazon and automaker Volkswagen (which has agreed to provide fresh capital to Rivian based on Rivian’s ability to meet certain business goals), Rivian seems like it will establish itself as a sustainably profitable business. However, this goal is still likely to be at least a few years away, given the need to invest in the business and research and development right now. Rivian could help you reach a seven-figure net worth, but it isn’t likely to do so quickly.

Moreover, the competition set today is much larger than it was when Tesla entered the auto market. At the time, Tesla was basically the only company making EVs. Today, there are a number of sizable EV makers. Virtually all of the traditional automakers are in the space, too. Even if Rivian is successful, it could still just produce a modest profit at the bottom of its income statement, thanks to the changed competitive landscape.

That said, even that outcome would require strong execution. Although Rivian has lived up to its goals, for the most part, so far, there’s no guarantee that it will continue to do so in the future. If the company starts missing its targets, investors are likely to turn deeply negative on the stock.

How much more negative could they get after a 90% price decline? Well, the stock happens to be up nearly 23% over the past year, which is notably better than the nearly 17% gain of the S&P 500 index (^GSPC -0.50%). Even after a 90%+ decline, there’s still ample room for a deep drawdown, as investors appear to have priced in a lot of good news in recent days.

Risk takers may find it attractive

It probably wouldn’t be a great idea to bet your house on Rivian. But it has achieved a great deal in a short period of time, with material opportunity for more success in the future. The problem is that it could also fall short of its goals and flame out, like many upstart EV makers have already done. If you see the execution strength and want to add Rivian to a diversified portfolio, it could help you reach millionaire status. Just go in recognizing the risk, which is material, and the time period you need to consider, which is long.

That’s why more conservative investors will probably want to sit on the sidelines for now. It makes a great deal of sense to wait at least until the R2 has been brought to market, so investors can assess how well the new car does with consumers.

Tesla (TSLA 6.18%) has dominated the electric vehicle (EV) market for over a decade, but the company’s core business has begun to struggle. Rivian Automotive (RIVN 7.80%), meanwhile, is still in the early innings as an automaker, but is starting to hit important milestones.

Both stocks come with risk, but one has a much better setup for investors right now.

Rivian’s R2 opportunity

Rivian slipped back into negative gross margins in Q2 after two straight positive quarters, with higher material costs due to supply constraints and new tariffs taking their toll. The loss of the federal $7,500 EV tax credit this fall will be another drag. Those are real headwinds, but they don’t take away from the progress that Rivian has been making.

Building out a profitable EV business is not easy, with even major automakers often struggling to sell their EV models for a profit. However, Rivian took a big step in this direction when it switched to a zonal architecture. This slashed the number of electronic control units and wiring in its vehicles, making its SUVs cheaper to build. It also helped the company secure a major partnership with Volkswagen, which opened up its checkbook to gain access to the technology and form a joint venture.

The next big step for Rivian will be launching its new, smaller R2 SUV next year. At a starting price of around $45,000, it will target a much broader audience than the R1 luxury line, which costs over $100,000 for some versions. Importantly, Rivian has locked in costs through supplier contracts and expects the R2 to deliver stronger margins through lower material costs, higher volumes, and shared fixed expenses with its R1 and electric delivery van lines.

On the financial front, Rivian is backed by Amazon, which uses its delivery vans, and it still has more cash coming from Volkswagen if and when certain milestones are reached. It has also secured a $6.6 billion loan from the Department of Energy to help build a second U.S. plant. With $7.5 billion in cash and short-term investments, the company has plenty of capital to support the R2 launch. Management is targeting earnings before interest, taxes, depreciation, and amortization (EBITDA) breakeven by 2027, which seems like a realistic timeline if the R2 is successful.

Rivian is still a high-risk name, but it has the balance sheet, the partners, and the right vehicle strategy to grow into a profitable business.

Tesla is losing momentum

Tesla’s core auto business has been heading in the wrong direction. Deliveries dropped double digits in each of the past two quarters, while auto revenue slid 16% in Q2. Profitability and cash flow have also taken a hit. Adjusted EPS dropped 23% last quarter, while operating cash flow fell 30% and free cash flow collapsed to just $146 million.

Meanwhile, its high gross margin regulatory credit sales were cut by more than half during the quarter. Musk has already warned investors that things could get worse once the EV tax credit disappears later this year.

Rather than focusing on improving its ailing auto business, Musk has instead continued to try to sell investors on Tesla’s autonomous driving and robotics ambitions. The company has launched a small pilot robotaxi program in Austin, Texas, but the service is limited to a geofenced area and requires a Tesla employee as a safety driver. It’s also already drawn scrutiny from local officials after several safety incidents.

Tesla is promising a rapid rollout of robotaxis across half the U.S. by year-end pending regulatory approvals, but the technology does not appear ready. Its decision to eschew lidar technology and use a camera-only approach remains controversial. This design saves costs, but the technology has struggled in some complex driving conditions, leading to questions around the safety of its approach. By comparison, Alphabet’s Waymo robotaxi is far ahead, with years of experience operating paid, driverless rides in multiple cities.

Image source: Getty Images.

Which EV stock wins?

Both Tesla and Rivian stocks carry their fair share of risk. Rivian is still unprofitable and faces near-term headwinds from tariffs and the loss of EV tax credits. Tesla, however, has a weakening auto business, a valuation that assumes big success in robotaxis and robotics, and a CEO whose actions have hurt the brand with many consumers.

Between the two, Rivian looks like the better investment. The company is improving its cost structure, expanding its market with the R2 SUV, and has the support of well-financed partners to help fund its growth. Tesla’s stock, by contrast, is still priced as if its autonomous driving and robotics bets will pay off, even though it has yet to prove they can.

For investors willing to take on risk, Rivian is the better EV stock to own in my view.