The Big Rivian Stock Plunge Continues

By Douglas A. McIntyre Published Aug 29, 7:10AM EDT

The Big Rivian Stock Plunge Continues — © 2024 Getty Images / Getty Images Entertainment via Getty Images

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Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) remains too small and loses too much money to survive, even if its vehicles are well-regarded.
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Rivian Automotive Inc. (NASDAQ: RIVN) stock is down 15% for the past month and 56% in two years. The market, which might have given up on the stock earlier in the year, has completely abandoned it recently. The fact that a fire damaged or destroyed about 50 Rivian vehicles is not the reason. The company remains too small and loses too much money to survive, even if its vehicles are well-regarded.

Investors became excited when Volkswagen said it would invest $5 billion in Rivian. It is worth looking again. The sum is $1 billion, with some investment to come later. The operative phrase in the announcement is “up to $5 billion.” If the venture’s early results disappoint VW, it may pull back. The investment does not negate that Rivian loses about $40,000 on each vehicle it builds.

Rivian’s revenue in the most recently reported quarter rose by a fraction year over year to $1.2 billion. It lost $1.4 billion, adding to several quarters in which it has lost $1 billion or more. It produced a tiny 9,612 units.

Rivian needs to be bigger, and its mid-range vehicles are too expensive to compete with Tesla or the mass of legacy car companies entering the EV sector. They cost about $80,000. To clear out inventory or drive demand, the company has resorted to 2.99% loans for 60 months. Loans of this kind usually carry an interest rate of 6% or higher.

There are no signs Rivian can be a success.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.