Rivian Automotive Inc has been successfully creating innovative and technologically advanced electric vehicles in America since 2009. They introduced their R1T all-electric pickup truck that became the Motor Trend Truck of the Year in 2022. After such a successful start, will Rivian stocks live up to expectations in 2022?
So far in 2022, Rivian stocks suffered a huge blow in its first IPO report. The company suffered because of low production and manufacturing. However, with the backing of Amazon, Rivian might be able to speed up its production in the near future. With constant competition from Ford, General Motors, and Tesla, it is uncertain what the future holds for Rivian.
A Close Look at Rivian Stocks in the Recent Past
In mid-December 2021, Rivian stocks reported Q3 earnings. This one development led to a serious downfall in the value of Rivians stocks. There was a $12.21 loss per share in the middle of the third quarter. Sales had reached about a million at the time the stocks plunged. Previously the stock had a value of over $78 on its IPO price but after the Q3 earnings, the value plunged.
Before facing this serious downfall, back in November 2021, its value was as high as $179. This goes out to show the strength in value for Rivian once its production line is working smoothly. Its relative strength rating is set at 57, while the composite rating is 44. The IPO has just recently happened, and one can blame the market’s volatility for the sudden downfall in stocks.
Will Rivian Stocks Live up to the Expectations in 2022?
At present, Rivian is manufacturing three electric vehicles at its Normal plant. The R1T pickup truck, R1S, a seven-seater SUV, and the EDV 700 delivery van. The factories based out in Illinois are under expansion from 150,000 to over 200,000 vehicles in the span of the upcoming year. Once plants like the one in Illinois and Georgia are established this year, production will go ahead full steam by 2024.
Besides their vehicle manufacturing business, they are looking forward to creating conservation-based developments. Starting from building charging networks in public parks and such spaces. As an electric vehicle manufacturer, Rivian strongly believes in making environmentally friendly car developments in society for the planet’s future. Tennessee and Colorado are the first two states where Rivian has already gained permits for these developments.
The Rivian stocks in 2022 may survive the plunge at the beginning of the year owing to the fact that their vehicles are in demand. In September last year, the Rivian company had around 50K R1T and R1S pre-orders for delivery. Statistics show that its Total Addressable market has the potential LTR of $67,900. This potential lifetime revenue can keep things going successfully for Rivian for the foreseeable future.
The fiscal revenue estimated for 2022 is about $3.55 billion for sales of about 50,000 orders in said year. This is an excellent development from the pre-orders made last year and shows considerable development to be expected by Rivian in 2022.
Benefits from Partnering with Amazon
Rivians partnership with Amazon is a strong driving point for the company. Amazon ordered around 100,000 delivery vehicles from Rivian, adding to its pre-order income. This pre-order from Amazon will help Rivian generate a stable source of income for the upcoming years. All in all, Amazon holds about a 20% stake in Rivian, making up for a stable partnership.
With the backing of a strong and stable company such as Amazon, Rivian will continue to hold safety in 2022 and the foreseeable future. Things may not be going as good as anticipated for Rivian but its partnership with Amazon at present is surely a good fallback.
Rivian stocks may be currently stable owing to the income generated via pre-orders. However, it must be kept in mind that these existing pre-orders can be cancelled at a premium rate, bringing us back to square one. Rivian’s vertical strategy suggests that there must be a greater cash flow in the near future to adequately.
Unless Rivian solves its issues with its partners and suppliers, the production line remains low and continues to harm stocks. To answer the question: will Rivian stocks live up to expectations in 2022? It is quite uncertain. Since the year has only started, it would be wise to wait till Rivian stocks stabilize.