In the beginning of this month, Rivian Automotive (NASDAQ: RIVN) had an event where it presented both its second-generation and third-generation electric cars (EVs). This revelation left investors feeling very impressed. Following the news, the stock had a brief surge in price, but it quickly lost its momentum and is still down by more than fifty percent in the year 2024.
Rivian stock, on the other hand, was given a buy rating by Piper Sandler analyst Alexander Potter today, after having previously been classified as a hold suggestion.
In addition, he increased his price estimate for each share from $15 to $21 per share. This resulted in the stock price increasing on Friday, since the new price objective indicates a nearly one hundred percent increase in the shares.
Rivian's top-secret weapon of choice The second-generation electric vehicle created by Rivian will be a mid-size SUV with a price tag that is around $30,000 less than the full-size R1S produced by Rivian. The starting price of $45,000 ought to attract a greater number of prospective clients. First shipments are anticipated to start in the beginning of 2026.
The analyst did, however, make a significant observation that will assist the corporation in retaining the capital that it need. Instead of being constructed at a facility in Georgia that is now under construction, the R2 will be constructed at the company's existing installation in Illinois. As a result of delaying the expenditures on the construction project, Rivian will save more than two billion dollars.
Rivian is also one of the few electric car start-ups that offers a distinctive lineup of vehicles. It is possible that the electric delivery vehicles that the company offers could be an even more compelling incentive to purchase Rivian shares at this time. Amazon is already one of its customers, and it also has other commercial purchasers for its delivery vans. This is happening while the company is expanding its consumer business.
It is still necessary for Rivian's new R2 platform to be well received by its constituents. On the other hand, the capital savings of more than two billion dollars ought to assist in extending the time frame for that success
Since the delivery van business continues to earn cash, investors may find it advantageous to follow the recommendation of Piper Sandler analyst Potter and purchase the stock. Potter believes that the shares have reached their bottom, and the company continues to generate cash.
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