Key Points
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Rivian’s R2 SUV could significantly accelerate vehicle sales.
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Uber’s robotaxi deal adds another potential growth catalyst.
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Rivian’s software business offers opportunities beyond EVs.
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Rivian Automotive (NASDAQ: RIVN) trades around $12 per share, giving the electric vehicle manufacturer a market capitalization of about $18 billion. That’s a fraction of Tesla‘s valuation, but Rivian still has a long way to go before achieving consistent profitability.
Still, with production accelerating and its lower-priced R2 SUV now reaching customers, Rivian could look a lot different five years from now. My prediction? A $5,000 investment today could be worth approximately $10,000 by 2031.
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The R2 could transform Rivian’s business
Rivian delivered 19,248 vehicles in the third quarter, up about 45% year over year. Management also reaffirmed its full-year delivery guidance of 65,000 to 70,000 vehicles. Worth noting: much of Rivian’s future growth depends on the R2.
Unlike Rivian’s more expensive R1 SUV, the R2 is designed to appeal to a much broader market. Initial versions start around $58,000, with a lower-priced standard version clocking in at $45,000 in 2027. Higher production volumes should also help Rivian spread its manufacturing costs across more vehicles, potentially improving profitability. But Rivian’s ambitions extend beyond selling electric vehicles, too.
The company recently landed a deal with Uber Technologies involving an initial 10,000 autonomous R2 vehicles, with an option for another 40,000. Uber also agreed to invest up to $1.25 billion in Rivian through 2031, contingent on certain milestones.
Rivian’s existing software business has been growing, too. The segment generated $515 million in Q2 revenue, with a gross margin of 42%. Its partnership with Volkswagen also provides another avenue to monetize vehicle software and electrical architecture.
What could $5,000 become?
Rivian shares closed at $12.34 on Oct. 19. At that price, a $5,000 investment would purchase approximately 405 shares. My five-year target is $25 per share. Here’s how I arrive at that number.
The EV maker should be able to grow annual deliveries to 250,000 vehicles by 2031. This is a reasonable target considering the company’s manufacturing expansion, which should push combined annual production capacity to 515,000 vehicles across its Illinois and Georgia facilities. Assuming an average selling price of $50,000, those deliveries would generate approximately $12.5 billion in automotive revenue.
Add another $2.5 billion in software and services (a reasonable expectation given the $515 million the company generated in software and services during Q2 2026), and Rivian could generate roughly $15 billion annually by 2031.
Applying a price-to-sales multiple of 2.5 to that $15 billion revenue estimate would give Rivian a market capitalization of $37.5 billion. That’s slightly below the roughly 2.8 times annual sales investors were paying as of Oct. 19. Assuming the company can limit shareholder dilution and keep its outstanding share count near 1.5 billion, that would translate to approximately $25 per share. And at $25 per share, a $5,000 investment would grow to about $10,130.
Rivian still faces significant risks, including competition, cash consumption, and the challenges of commercializing autonomous vehicles. But if the R2 succeeds and its software business continues expanding, doubling your money over five years looks achievable.
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.
