Investors eyeing the electric vehicle (EV) sector should brace themselves for a journey requiring patience, as building the necessary production infrastructure and attracting customer demand can take years to implement. Along this path, encountering obstacles is par for the course, influenced by both market fluctuations and internal company dynamics.
Looking broadly, the pace of EV growth is decelerating annually. This downturn is partly attributed to soaring interest rates, posing challenges for consumers seeking financing to invest in EVs. Consequently, several EV makers have already filed for bankruptcy, while others are grappling to maintain stability amidst the turbulence.
One such EV player, Rivian (NASDAQ:RIVN), is currently implementing a series of cost-cutting measures aimed at positioning the company for greater profitability going forward. However, this has led to a reduction in the number of its cars manufactured in Q1, down by 20% from the previous quarter.
Nevertheless, the company can highlight several positive developments under its belt. These include a 30% improvement in production efficiency, strategic partnerships with major tech firms, and plans for the future production of its R2, a mid-size, five-seat SUV set to be available in Q1 2026.
Furthermore, the Biden administration decision to place tariffs on Chinese imports, along with a $7,500 tax credit designed to encourage consumers to purchase EVs, should prop-up business going forward.
Despite a challenging market performance with RIVN shares declining by over 50% this year, Noah’s Arc Capital remains bullish about Rivian’s trajectory, viewing the company’s current direction favorably.
“I see promising future prospects for Rivian due to their cost-cutting measures, partnerships with companies like Amazon and Google, and favorable government policies,” the investor opined.
Noah’s Arc is particularly satisfied with RIVN’s commitment to improving its production practices, as the EV maker attempts to streamline operations and limit its losses per vehicle.
“One of Rivian’s big focuses for this year is to optimize their workforce and cut costs. I believe the company is well on their way to succeeding with this, with management now guiding for Gross Profits in Q4. I think this is big,” says Noah’s Arc.
Rivian’s partnership with Amazon is another reason the investor remains bullish, as are rumors of potential linkages with Apple. Noah’s Arc believes that these corporate customers would offset weakness in consumer demand.
Hence, with conviction, Noah’s Arc rates RIVN shares as Strong Buy. (To watch Noah’s Arc’s track record, click here)
Turning now to the Wall Street analysts’ view, where RIVN stock claims a Moderate Buy consensus rating, based on a mix of 10 Buy recommendations, 8 Holds, plus 2 Sells. Its 12-month price target of $13.89 would yield an upside of ~36% from current levels. (See RIVN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
