Rivian Is Still a Buy For Me

Whenever you invest in what is essentially a startup, it is never an easy call to make. There are just too many variables and uncertainties. You have to really believe that the company can be successful despite enormous odds against it—I am talking about Rivian. An electric automaker competing directly with companies like Tesla, but that is ultimately also competing against all of the other big automakers already in business.

Because nearly all of them like Ford, Toyota, General Motors, Nissan, Volvo, Dodge and numerous other players are all adding electric vehicles to their fleet offerings.

Being the new guy on the block just means you have to work that much harder to succeed. It's going to be a longer road ahead and you are going to experience quite a lot more hiccups along the way.

By the end of the 4th quarter of 2022, Rivian was able to manufacture and deliver roughly 25,000 vehicles. That's considerably less than it projected from even a year earlier around the time the stock was initially offered. But it is also showing progress in ramping up production.

They were able to add a second shift, for example, in order to better keep up with demand and ensure faster delivery times for pre-ordered vehicles, which Rivian says they enough orders right now to keep them busy well into 2024 with new orders coming in every day and on the rise.

People are interested in owning Rivian vehicles, and that much seems clear.

I have even begun to see more of them on the road, which is always a positive sign. I am not seeing nearly as many on the road as I would like to see. But it was a long time before even Tesla's became a vehicle I would commonly see.

Now I see them all the time.

What I have mostly seen are the Amazon delivery vehicles. But I have seen at least two of the R1T trucks on the road although I have yet to spot their SUV version, the R1S.

Rivian has also been hard at work getting a new factory up and running in Georgia where they have plans to introduce as new R2 platform—it will be interesting to see what that looks like, but so far nothing has been revealed. Although we do have a good idea about what it is.

More affordable vehicles that will appeal to a broader spectrum of potential customers.

The thing is that Rivian vehicles continue to be among some of the more expensive options. Granted, at a $78,000 starting price for an R1S it's not outside the realm of even some pickup trucks that are selling for much more than that. And many SUVs aren't all that cheap either.

It is simply more difficult to pull the trigger on buying something like that at that price point because the electric vehicle market is still quite small compared to traditional fossil fuel vehicles, and there is limited capacity for charging stations yet.

Nonetheless, Rivian continues to be forward looking and forward thinking, and despite the short-term issues they have faced getting product to market, they are doing the necessary work to keep everything moving forward, and that's what I need to see when I decide to hold my investment or add more shares.

I still believe that the vehicles Rivian is making have appeal to the driver as opposed to the techie, something I have noted before that I think is key to their future success and their ability to compete with other driver-focused electric vehicles being produced by the established automakers.

The long and short is that I am still long on Rivian and intend to hold my shares for a long time. Unless something dramatically changes, which I do not anticipate right now. But they do have to meet their projected targets and stay on track to reduce costs and bring the company closer to profitability.

The latter of which could be many years in the making. It took Tesla over 2o years to actually turn their first profit.

Lead image from Motor Trend. Rivian R2: Everything We Know About Rivian's Next All-New EV (motortrend.com)

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