Key Points
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Rivian has proven it can build desirable vehicles at scale, with the R2 proving it can also sell them to the mass market.
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The company still needs to produce more vehicles, but a successful R2 moves it one step closer to profitability.
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Rivian isn’t Tesla, but when Tesla turned sustainably profitable, its stock rose dramatically.
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Rivian (NASDAQ: RIVN) hasn’t exactly been hiding the fact that it is using Tesla‘s (NASDAQ: TSLA) playbook. And the R2 is a significant step along the path Tesla blazed. Which is why it is such good news that the R2 is now Rivian’s best-selling vehicle. If Tesla is the example, investors could see Rivian’s stock price rocket by as much as 1,000% if the good news keeps rolling in.
But through 2030, more modest expectations are probably appropriate. Here’s why I think Rivian’s stock could double or even triple over the next three years or so.
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What’s going on with Rivian?
Like Tesla, Rivian started out by producing a high-end all-electric vehicle. The R1 truck was well received and won multiple awards. However, the volume was so low that the company lost money on every truck it sold. This is why the second step was to ramp up production, again, just like Tesla. That process went relatively well, leading to Rivian generating a gross profit.
A gross profit simply means that it made more money selling its trucks than it cost to make them. There are other costs to running a business, like selling, general, and administrative expenses and research and development costs. Achieving a gross profit was a huge step, but Rivian was still losing money as a business. That’s where the R2 comes in.
To be a sustainably profitable company, Rivian needs to increase the number of cars it sells. That will allow it to spread its costs over more vehicles. However, the high-end of the market is limited, so Rivian needs a successful mass-market vehicle that costs less. That’s what it was looking to create in the R2. It delivered, with the new vehicle helping to increase deliveries by 46% year over year in the third quarter of 2026. The R2 was Rivian’s most popular model. This is a huge win.
What comes next for Rivian?
Rivian is clearly pleased with its results, but it is also realistic. High demand for the R2 is good, but it still needs to produce more vehicles. That means more capital spending is in the cards as the automaker continues to invest to expand its manufacturing capabilities. To that end, the company is building a new auto plant in Georgia. It probably won’t be up and running until late 2028.
So, in the near term, the start-up is likely to continue to bleed red ink. Until it is sustainably profitable, stock gains will likely be limited. But each step closer to the end goal could see investors reward Rivian with a higher stock price. And, assuming the Georgia plant investment goes well, it isn’t unreasonable to believe that Rivian could be sustainably profitable by the end of the decade or early in the 2030s.
TSLA data by YCharts
Tesla’s stock rose as it neared profitability and then took off like a rocket after it became sustainably profitable. If the same trend were to occur with Rivian, it isn’t unreasonable to believe the stock could double or triple by 2030. That would turn a $1,000 investment into $2,000 to $4,000. Even more gains could be on tap thereafter.
Only for aggressive growth investors
That said, Rivian is really only appropriate for more aggressive growth investors. The story sounds good, but a lot could still go wrong. Notably, the R2 is a very new vehicle, and consumer enthusiasm around the product might cool off. That could turn this huge opportunity into a massive bust, which is why more conservative investors should probably stay away. However, if you believe in the Rivian story, the upstart continues to hit the big-picture milestones that propelled Tesla to massive success.
Should you buy stock in Rivian Automotive right now?
Before you buy stock in Rivian Automotive, consider this:
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
