Rivian Automotive (RIVN) has announced a multi-year strategic supply agreement with South Korean battery maker LG Energy Solution. The electric truck marker reported Q3 earnings today with mixed results. While Rivian missed Wall Street estimates on both earnings and revenue, it reaffirmed its production guidance and vehicle delivery outlook. However, the earnings report also brought news of a new supply agreement with LG Energy, which could be a positive development for Rivian.
What’s Happening with Rivian Stock
Despite the mixed Q3 earnings, Rivian stock closed out trading today up 3.5% and saw shares rise slightly in after hours trading. This suggests that the market isn’t overly concerned with Rivian’s earnings and revenue misses. This performance follows a difficult trading day yesterday, during which RIVN stock plunged, dragging it into the red for the week.
Rivian’s reaffirmed guidance suggests that it is on track to meet production estimates. Now, the partnership with LG Energy could make that even easier. In its earnings statement, Rivian states that its new partner will be supplying 4695 cylindrical battery cells for its midsize EV production, adding that within a year, it expects that these batteries will be produced at LG Energy’s facility in Queen Creek, Arizona.
For EV makers, battery supply has been a key component of production, often posing a challenge. Rivian’s new strategic supply agreement could help increase the number of vehicles it can build in the U.S., especially if the batteries are made at the Arizona plant, aligning with Rivian’s focus on domestic manufacturing.
Wall Street Is Fairly Bullish on RIVN Stock
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RIVN stock based on eight Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Despite shares falling 41% over the past year, the average RIVN price target of $16.67 per share implies 66% upside potential.
