Rivian Automotive Stock Forecast: RIVN breaks above $16 resistance threshold ahead of earnings


  • Rivian stock reached an intraday high above $16 on Tuesday for the first time in nearly five months.
  • Rivian has been benefiting of late from its software partnership with Volkswagen.
  • Tesla's upcoming debut of its RoboTaxi is also lending EV stocks a tailwind.
  • Morgan Stanley has a $33 price target on RIVN, which forecasts a 100% gain over the next year.

 

Rivian (RIVN) stock made it back above $16.00 per share on Tuesday for the first time since February 21 — nearly five months ago when an earnings release sent Rivian stock reeling.

Rivian is benefiting from renewed interest in electric vehicle leader Tesla (TSLA), as well as its own partnership with Volkswagen (VWAGY) and upcoming earnings announcement several weeks away.

The broad market was boosted on Tuesday after Federal Reserve (Fed) Chair Jerome Powell signaled in Congressional remarks that he was worried about keeping rates high for too long. This gave the market further certainty that interest rates would be lowered at the September meeting.

Rivian stock news

Rivian and other EV stocks have witnessed their share prices making gains over the past month as they benefit from the coattails effect of EV king Tesla’s rally. Tesla stock has gained some 48% over the past month as excitement surges for Elon Musk’s unveiling of the company’s RoboTaxi offering on August 8. 

A full month away, traders expect TSLA stock to return to bullish form as the market embraces Tesla’s entry into the autonomous taxi industry — an industry that is expected to grow to $600 billion in revenue globally by the end of the decade.

Of course, Rivian does not have an autonomous taxi division. But RJ Scaringe’s electric truck and SUV concern is coming off excitement about June’s announcement of a software partnership between it and Volkwagen. The second largest automaker in the world has agreed to invest as much as $5 billion in Rivian in order to gain access to the smaller company’s technology licenses.

Essentially, the news suggests that Rivian’s tech is good enough that Volkswagen wants to base its next generation of EV software and electrical architecture on Rivian’s platform. Morgan Stanley has a $33 price target on Rivian largely due to its in-house autonomous architecture, which may be what Volkswagen is after.

The agreement also provides Rivian with the cash to build its next factory, most likely in Georgia where an earlier one was planned. This will allow its mass market R3 model to reach consumers much quicker than expected.

Rivian reported on July 2 that it had delivered 13,790 vehicles during the second quarter and is set to deliver at least 57,000 in 2024. Management has reiterated that it is on track to witness positive gross profit in Q4 and positive adjusted EBITDA in 2027.

 

EV stocks FAQs

Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.

EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.

We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.

China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.

Rivian stock forecast

Rivian stock ran up to an intraday high of $16.17 on Tuesday before slumping back below $16.00. This is notable because the $14.50 to $16.00 range was supportive in October and November of 2023 and January and February of this year. Breaking above $16 would suggest that the party is not over and that shareholders should expect the rally to continue.

One notable price target is $19.50. This is where RIVN stock found support and then resistance in August 2023 through the beginning of 2024. Another possibility is $24.00, where its rally petered out back in December 2023.

RIVN daily stock chart

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