6. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 37
One of the most promising EV stocks, Rivian Automotive, Inc. (NASDAQ:RIVN) is an American electric vehicle manufacturer and technology company that is most known for its electric SUVs and pickup trucks. It also produces the electric delivery van (EDV) for Amazon.
In June, the company announced a joint venture with Volkswagen Group, with plans to develop next-generation electric architecture and advanced software technology. The partnership aims to improve software development for both companies by combining their strengths. Rivian (NASDAQ:RIVN) will share its electrical design and technology to help lower costs and speed up innovation.
Through this joint venture, Volkswagen will be able to use the company’s existing technology, making it easier to transition to a new design system. Both companies expect to launch vehicles featuring this new technology by the end of the decade, while still running their own businesses separately.
Volkswagen plans to invest $5 billion in Rivian (NASDAQ:RIVN), starting with a $1 billion convertible loan that can turn into stock under certain conditions. The remaining $4 billion will come in later stages.
While the company was struggling with significant losses, this deal is a breath of fresh air at the right time. CNBC reported that Alex Potter, senior analyst at Piper Sandler believes that the partnership is not only crucial for the EV producer, but the entire automotive industry.
Rivian (NASDAQ:RIVN) announced its production and delivery figures for the third quarter on October 4. It reported production of 13,157 vehicles and 10,018 deliveries. The company is facing production challenges due to a shortage of a shared component affecting its R1 and RCV platforms, which began in Q3 and has intensified.
As a result, the company has lowered its annual production forecast to between 47,000 and 49,000 vehicles. However, it has maintained its annual delivery outlook, expecting low single-digit growth compared to 2023, aiming for between 50,500 and 52,000 deliveries.
After the report, Canaccord slightly reduced its price target on the company stock from $30 to $28 but maintained a Buy rating on Rivian (NASDAQ:RIVN). The firm highlighted that supply chain issues with components affected production in the third quarter of 2024. However, the company’s deliveries are still expected to stay on schedule, as management plans to utilize its inventory to satisfy demand. Despite this positive outlook, Canaccord has also adjusted its forecasts for gross margins and deliveries for 2025 downward.
Meridian Hedged Equity Fund stated the following regarding Rivian Automotive, Inc. (NASDAQ:RIVN) in its Q2 2024 investor letter:
“Rivian Automotive, Inc. (NASDAQ:RIVN) is a US-based electric vehicle manufacturer focused on the design, development, and production of electric adventure vehicles, pickup trucks, and commercial delivery vans. We own Rivian because we believe the company is a future leader in the growing electric vehicle market with a strong brand, compelling products, and a vertically integrated business model. During the quarter, Rivian’s stock price was driven by its progress on cost reduction initiatives and management’s stated confidence in achieving positive gross margins by the end of 2024. The recent announcement of a joint venture with Volkswagen, involving up to $5 billion in investment, also significantly boosted Rivian’s financing outlook and validated its technology. We trimmed our position in Rivian given the strong performance in the quarter.”
