With stocks that have fallen from 14%to date, Rivian cars (NASDAQ: RIVN) The bad start of 2025 began. Although the company has finally achieved its goal of gross profitability, the market remains skeptical of long -term prospects as a competition in the electric vehicle industry (EV).
Let’s dig deeper to determine if there is a light at the end of the tunnel for Rivian.
Rivian reported on earnings in the fourth quarter of February 20th, and the results were convincing. The total revenue increased by 32% compared to the year to $ 1.73 billion, and the company submitted the promise of executive director Ryan Scaringe with gross profit of $ 170 million compared to a loss of $ 606 million in the previous period. It’s a $ 776 million improvement.
Furthermore, Rivial working loss It dropped by $ 58% to $ 740 million, which could reduce financial combustion and reliance on external financing techniques such as debt or dilution of shareholders. For the first time, Rivian looks like a sustainable business with the path to net income if he can continue to increase his business while controlling costs.
Despite Rivian’s success in determining what I believe is a clear path to profitability, the market was less impressed with these fourth quarter results. The stock received a fall from Bank of Americawho ran into a rating from a “neutral” to “weaker effect”, citing the risks of competition as other car manufacturers like Lucid group and General Motors He is expected to release new electric SUVs on the market 2026 and 2027.
Analysts also expect the demand for EV to slow down due to a lesser interventionist approach to Trump’s administration. The new president seized several EVs from Era Biden’s EV, and some believe that he could eventually try to abolish $ 7,500 tax loans to buy EV. This outcome could be catastrophic to Rivian, because, unlike some of its larger rivals, the company may not have extent or cash reserves to absorb a potential shot for demand and margins.
However, Rivianov leadership It could be the biggest red flag. The administration expects that only 46,000 to 51,000 vehicles will deliver in all 2025, which is a drop of 51,579 delivery 2024. Although political uncertainty probably makes some of this forecast, it shows that Rivian continues to face the battle of uphill because he tries to increase his business model.
Over the next five years, Rivian’s survival will depend on his ability to encourage growth while controlling financial combustion. The shift to gross profitability will make it much easier. Furthermore, a recent partnership with Volkswagen And a loan from the Ministry of Energy could provide up to $ 10 billion in incremental capital.
