Rivian (NASDAQ:RIVN) shares have been under pressure for different reasons this year, the most recent being a Trump win that signals tough days ahead for the EV industry, as this is a segment the President-elect has been consistently disdainful about.
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Nevertheless, investors were uplifted on Wednesday as Rivian and auto giant Volkswagen announced their agreement to establish a new joint venture (JV). The endeavour, named Rivian and Volkswagen Group Technologies, involves a deal of up to $5.8 billion (up from the original $5 billion) and through the collaboration, both companies aim to advance next-gen electrical architecture and top-tier software tech across a range of future electric vehicles.
The JV’s focus will be on utilizing Rivian’s current electrical architecture and software technology stack, thereby setting the stage for its R2 launch in the first half of 2026 and the launch of Volkswagen’s first models as early as 2027.
Wedbush analyst Daniel Ives calls the news a “breath of fresh air as the Rivian story develops.”
Rivian plans on using the substantial windfall to fuel its future growth, enabling further vertical integration of its software platform and electrical architecture. This is expected to result in cost savings and pave the way for even better vehicles in the future. “Importantly,” said Ives, “this partnership will provide capital needed for the R2 ramp and GA plant R2/R3 midsize platform which we view as a large step in the right direction and a key move for Rivian going forward.”
While Ives considers the announcement encouraging, he believes Wall Street will remain primarily focused on Rivian’s R1 execution plans, production optimization, progress at the Georgia plant, and the path to profitability over the next quarter/12 months.
“After seeing lots of choppiness and pain points in the supply chain in the past year, we believe this is the right partner announcement coming in at the right time as RIVN looks to navigate the ship in stormy waters with sufficient capital to fund its EV roadmap over the coming years,” the analyst summed up.
It’s all about production and execution now, and in the meantime, Ives maintains an Outperform (i.e., Buy) rating on RIVN shares along with a $20 price target. This target puts the upside potential at 94%. (To watch Ives’ track record, click here)
Turning now to the rest of the Street, where based on an additional 8 Buys, 11 Holds and 1 Sell, RIVN stock claims a Moderate Buy consensus rating. The average price target stands at $14.89, implying gains of ~44% are in store for the coming year. (See Rivian stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
