U.S. EV maker Rivian Automotive (RIVN) is understood to be providing the software and architecture for German automaker Volkswagen’s new ultra-cheap electric vehicle. However, it wasn’t enough to stop its stock reversing 2% in pre-market trading.
Is Rivian the Mystery Maker?
According to a report in TechCrunch, Rivian is the mystery provider Volkswagen teased its audience about yesterday when it unveiled the ID EVERY1 – a small four-door hatchback. The car is expected to go into production in 2027 with a starting price of $21,500. A second, slightly more expensive EV called the ID.2all, will be priced around $27,000 and be available next year.
Volkswagen didn’t name Rivian during the EVERY1 launch. All the company said was that it would be the first model in the VW group to use a “fundamentally new, particularly powerful software architecture.” However, thanks to a source, TechCrunch reported that the EVERY1 will be the first to ship with Rivian’s vehicle architecture and software as part of a $5.8 billion joint venture struck last year between the pair. The ID.2all is based on the E3 1.1 architecture and software developed by VW’s software unit Cariad.
Both vehicles are part of VW’s new category of electric urban front-wheel-drive cars that are being developed under the “Brand Group Core.” The vehicles will be rolled out for the European market.
RIVN Stock Needs Some Revs
It’s significant news for Rivian whose stock has dropped 14% in the year to date. That’s partly down to concerns over slower sales growth for its cars – its recent delivery outlook for 2025 of between 46,000 and 51,000 units suggested a mid-single-digit year-over-year drop in volume. Stalling EV demand, increased competition and regulatory headwinds are to blame.
However, there is much more excitement around its Software & Services arm, which thanks to its VW joint venture is expected to hit $1 billion revenues. Management believes this part of its business can keep delivering revenues growth and capitalize on its tech innovation. Getting the first EV off the production line and powering through European streets could lead to more revving up of the stock in the months ahead.
Is RIVN a Good Stock to Buy Now?
On TipRanks, RIVN has a Hold consensus based on 6 Buy, 11 Hold and 3 Sell ratings. Its highest price target is $23. RIVN stock’s consensus price target is $14.43 implying an 26.36% upside.
