Rivian (NASDAQ:RIVN) investors will be glad once the end of 2024 truly arrives. It’s been a miserable year for the EV startup, with shares showing losses of 56% so far.
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But with 2025 coming into view, do its prospects appear more sound? Mizuho analyst Jason Getz is not too certain.
A parts shortage was the main reason behind the company recently lowering its production guide for the year from 57,000 to 48,000, although Rivian did stick to its delivery guide of 50,500 to 52,000 vehicles. Nevertheless, Getz continues to see challenges into the rest of the year and 2025.
Getz expects Rivian to operate two R1 shifts next year, which could lead to a total production of 56,000 units and one shift on the EDV, aiming for around 15,000 units. However, over a month of shutdowns during the transition to the R2, supply constraints, and a possible decline in EV demand—especially in the premium segment priced over $80,000—are all challenges the company could face. Additionally, with the lower 2024 production potentially “impacting fixed cost absorption,” it could be difficult for the company to reach its target of turning gross margin positive in the December quarter.
As such, with Rivian’s 2025 production likely reaching ~71,000 units (not factoring in production shutdowns and the possibility of reduced demand), Getz thinks the Street’s expectations of 59,000 deliveries could be a tad optimistic.
Meanwhile, on the positive side, Volkswagen has invested $1 billion in the company via a convertible note and has committed to an additional $1 billion for the JV before the year is out. Furthermore, VW plans to invest around $1 billion in “direct equity” in both 2025 and 2026, contingent on meeting certain financial and tech milestones, with an additional $1 billion loan agreement expected later in 2026. This brings the total capital commitment to $5 billion. “We see the first vehicles being developed by the JV rolling out by the end of the decade as both sides work to integrate E/E architecture and SW into more vehicles,” Getz said on the matter.
With its lower-cost R2 slated for a release in 1H26, the analyst thinks Rivian has a “good product roadmap,” while the VW deal offers a better balance sheet with “less liquidity risk.” However, worries regarding a soft US EV market with “potential demand challenges” trump the positives.
Accordingly, Getz rates RIVN shares a Neutral, while lowering his price target from $15 to $12, although the new figure still makes room for 12-month returns of 15%. (To watch Getz’s track record, click here)
The rest of the Street’s ratings are split into 9 Buys and Holds, each, making the consensus view a Moderate Buy. There are nice gains projected here; at $17.63, the figure implies shares will climb 71% higher over the one-year timeframe. (See Rivian stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
