While 2024 was a record year for electric vehicles (EVs) in the United States, 2025 is filled with uncertainty thanks to President Trump’s unfriendly stance on e-mobility, broader economic concerns and weakening consumer confidence. The high price points of EVs and worries about charging infrastructure make the road tougher. Amid this backdrop, how is Rivian Automotive RIVN positioned?

This California-based EV startup has seen its shares drop 23% in the past three months, underperforming its peer group and the S&P 500 index. Despite hitting a key milestone in fourth-quarter 2024 by recording gross profit, Rivian’s stock is down 19% post-earnings. Despite backing from companies like Amazon AMZN and Volkswagen VWAGY, Rivian still faces steep cash burn. Adding to the pressure, management issued a conservative 2025 delivery target, acknowledging the macro uncertainty.

With RIVN trading near $11— down almost 94% from its all-time high — is this dip a buying opportunity, or is there more pain ahead? Let’s break down whether Rivian is a smart buy or a falling knife.

3-Month Price Performance

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Factors Working in RIVN’s Favor

Affordable Models on the Horizon: Rivian plans to expand its lineup with the R2, R3, and R3X, targeting budget-conscious buyers. R2, a midsize SUV, will be launched in early 2026 at a much lower price than the R1 models. CEO RJ Scaringe sees R2 as a key growth driver, highlighting major cost savings in materials and production.

Mega Deal With Volkswagen: Rivian’s deal with Volkswagen is a major catalyst. The German auto giant will invest up to $5.8 billion in Rivian and their joint venture (JV) by 2027. So far, it has invested $1 billion through a convertible note and an additional $1.3 billion upon finalizing the JV in fourth-quarter 2024. The remaining $3.5 billion will be provided over the next few years. The partnership focuses on developing Rivian’s next-generation electrical architecture and software, starting with the R2 model. The JV will leverage Rivian’s existing technology to support the launch of the R2 in the first half of 2026.

Commercial Van Business Gaining Traction: In 2024, Amazon’s Rivian-built Electric Delivery Vans (EDVs) delivered over one billion packages in the United States, highlighting the strength of their partnership and Rivian’s scalable technology. With more than 20,000 EDVs now in service, Rivian continues to support Amazon’s push for a greener delivery network. Beyond Amazon, Rivian’s Commercial Van (RCV) business is expanding, attracting interest from various trades and delivery services. Customers can now begin purchasing RCVs through Rivian’s website.

Cost-Cut Efforts: Rivian cut vehicle costs by $31,000 in the final quarter of 2024, benefiting from engineering optimizations, supply chain savings and lower commodity costs. The second-generation R1 models are expected to reduce material costs by 20%, while operational efficiencies at the Normal plant further support cost-cutting efforts. Rivian achieved $170 million in gross profit in the last reported quarter and aims for modest profitability in 2025. CEO RJ Scaringe sees the upcoming R2 models as a major growth driver, with material costs nearly 50% lower than R1’s and other production costs also halved. EBITDA losses shrank 29% to $2.7 billion in 2024, with further improvements expected in 2025, as Rivian projects an EBITDA loss of $1.7–$1.9 billion.

Rivian’s Near-Term Headwinds Are Hard to Ignore

While Rivian has strong long-term potential, several near-term hurdles could impact its growth and stock performance.

Uncertain Policy Environment: With Donald Trump back in the White House, Rivian faces policy risks. On his first day in office, Trump revoked Biden’s EV-friendly executive order and froze funding for a $5 billion charging infrastructure program. He also signaled plans to roll back emissions regulations and EV tax credits. These changes could weaken consumer incentives and slow down EV adoption, directly affecting Rivian’s sales. A soft 2025 delivery forecast of 46,000–51,000 vehicles — down from 51,579 in 2024 — reflects these challenges. Bank of America downgraded the stock last month, citing Trump-related risks and a weak 2025 outlook.

Affordability & Competition Concerns: EVs remain expensive, with the average price at $55,544, according to Kelley Blue Book. Rivian’s trucks are on the higher end of the market, making demand sensitive to economic conditions. The EV market is becoming increasingly crowded, with legacy automakers and new entrants fighting for market share. Rivian must differentiate itself while maintaining growth in a highly competitive environment. Its next model offering is still a year away.

Uncertain Federal Loan for Georgia Plant: In late 2024, Rivian secured a $6.6 billion loan from the U.S. Department of Energy to build its new Georgia plant, which would support the R2 and R3 models. However, Trump has frozen federal clean energy loans, putting this funding at risk. Without it, Rivian may face delays or financial strain in expanding production.

Cash Burn and Financial Strain: Rivian’s cash reserves fell from $7.9 billion at the end of 2023 to $5.3 billion in 2024, raising concerns about sustainability. The company continues to burn cash, even as it works to improve profitability.

What Do Estimates Say for RIVN?

In the past 60 days, loss per share estimates for RIVN have improved for the first and second quarters of 2025 but have widened for the full years 2025 and 2026.

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RIVN's Valuation is Stretched

Rivian’s stock remains expensive, trading at a forward sales multiple of 2.10—higher than its peer group. The stock has a Value Score of F.

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How to Play Rivian Now

Rivian’s recent cost-cutting efforts and strong partnerships are promising but near-term risks outweigh the positives. Policy uncertainty under the Trump administration, slowing EV demand, weak delivery guidance and the company’s ongoing cash burn create significant headwinds. With its much-awaited R2 model still a year away and valuation stretched, the stock may struggle to find support. Investors looking for a rebound should remain cautious. Given these challenges, buying the dip now seems premature. Instead, one should stay on the sidelines and wait for clearer signs of stability.

RIVN currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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