Why Rivian Stock Jumped Today

Investors in the electric vehicle (EV) sector have been watching Rivian Automotive (RIVN 4.38%) closely over the last year. Its product lineup and ties to package delivery giant Amazon have helped it stand out as a potentially highly successful EV start-up.

Now the company has scheduled a big update on its technology, and that’s helping push shares higher. Rivian stock jumped as much as 6.5% this morning and remained higher by 3.3% as of 11:30 a.m. ET.

Rivian to reveal next-generation EV

Rivian just announced it will hold its long-awaited initial introduction of the next-generation R2 EV platform on March 7. The reveal event will be the first time consumers and investors will get details surrounding the R2. It is expected to be the platform that Rivian will use to offer lower priced vehicles with more mass market appeal.

Rivian’s current R1 pickup truck and SUV are higher priced offerings with a more limited market. Rivian trucks currently cost $75,000 to $80,000. The R2 technology and design should launch Rivian into a market size that could lead the company to profitability. While the EV start-up has been improving production rates over the past year, investors have remained skeptical as it burns through cash along the way.

Is Rivian stock a buy?

Its financial position is one of the main reasons why the stock has dropped more than 30% so far this year. Rivian ended the third quarter with over $9 billion in cash and cash equivalents. But the company expects to lose $4 billion on an adjusted EBITDA basis for the full year 2023. (EBITDA stands for earnings before interest, taxes, depreciation, and amortization.)

Full-year results will be released next week on Feb. 21. The company may speak more about the R2 reveal event then, but will undoubtedly leave the details for March 7. The future of Rivian will depend on what it says.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Amazon and Rivian Automotive. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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