Rivian (NASDAQ:RIVN) CEO RJ Scaringe sauntered on to the stage last week for the company’s inaugural Autonomy & AI Day last week, clearly hoping to spur excitement for the EV maker’s AI chip technology and its plans for autonomous driving.
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The company said that by the end of this year, it will introduce Universal Hands-Free driving on more than 3.5 million miles of roads across North America, a significant increase from roughly 135,000 miles today, and this feature will be available to all current R1 Gen 2 vehicles. In 2026, Rivian intends to launch point-to-point eyes-on, hands-off navigation, eventually progressing to eyes-off, hands-off capability. Ultimately, Rivian aims to provide personal Level 4 autonomy, meaning vehicles can operate without a driver.
Looking ahead, Rivian plans to debut its Gen-3 hardware and software platform in late 2026, featuring a multi-modal sensor suite. The company has developed a custom silicon chip for its Gen 3 Autonomy Computer to power its autonomous driving platform. Additionally, Rivian introduced Rivian Unified Intelligence (RUI), a multi-modal, multi-LLM data framework that will be integrated across the company’s operations, including assembly, service infrastructure, and predictive maintenance.
Overall, the market liked what it saw, as RIVN’s share price enjoyed a sizeable bump (some 12%) in the day after the gathering.
Morgan Stanley’s Andrew Percoco, an analyst ranked among the top 2% on Wall Street, attended the event, and was ready to acknowledge that the company “laid out an impressive tech roadmap and is clearly positioning to remain an AI-leader in the auto industry.”
“However,” the 5-star analyst went on to add, “there are several risks over the next 12 months worth highlighting.”
First, Percoco thinks the demand outlook for the upcoming R2 is uncertain, especially given the evolving hardware roadmap. Not all R2 vehicles will necessarily come equipped with LiDAR, which could limit technological potential and increase the risk of early R2 units becoming obsolete. Second, achieving eyes-off/hands-off functionality seems contingent on strong R2 adoption to generate sufficient data. Lastly, developing chips in-house might require substantial future R&D investment to drive innovation, raising the business’s “capital intensity” and potentially putting pressure on the timeline for profitability.
As such, given expectations of weaker-than-anticipated R2 demand amid a broader slowdown in EV sales, a potential Osborne effect where the R2 and Gen-3 vehicle architecture could reduce demand for existing models, plus a lengthier trajectory to profitability, Percoco reiterated an Underweight (i.e., Sell) rating on the shares. Percoco backs that rating with a price target of $12, implying the stock will shed 39% in the months ahead. (To watch Andrew Percoco’s track record, click here)
Elsewhere on the Street, 4 other analysts are bearish on RIVN’s prospects too, while the addition of 9 Holds and 5 Buys add up to a Hold consensus rating. The forecast calls for a one-year loss of ~16%, considering the average target clocks in at $14.82. (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.