Rivian Automotive Inc (NASDAQ: RIVN) is in focus today after reporting its first quarterly gross profit, indicating it’s succeeding in cutting variable costs and improving the overall efficiency of its operations.
Rivian’s earnings release is putting some pressure on Tesla Inc (NASDAQ: TSLA) this morning because the Irvine headquartered firm came in ahead of TSLA on a key metric.
On the downside, however, Rivian failed to impress its investors with its future guidance, which resulted in a 4.0% hit to the EV stock in premarket on Friday.
Tesla’s profit per vehicle drops while Rivian surges ahead
Tesla shares are sliding this morning because Rivian came in ahead of Street estimates for the top and bottom lines in Q4.
In comparison, billionaire Elon Musk’s company missed on both fronts in its latest reported quarter.
The disappointment for its investors is: when RIVN can beat expectations with lesser resources and a much smaller brand name, why couldn’t Tesla in the fourth quarter.
TSLA is taking a hit at writing also because Rivian earned $12,000 in profit on each vehicle it delivered in its recently concluded quarter.
Tesla, in comparison, came in at $6,600 only on that metric in its fiscal Q4.
In fact, Tesla couldn’t even keep its profit per vehicle at the year-ago level.
In the fourth quarter of 2023, it had earned $8,400 on each delivery.
Rivian’s outlook may prove to be too conservative
Rivian now expects to sell about 48,500 electric vehicles this year – significantly less than 55,000 that analysts had called for.
The company’s investors were left disappointed also because the number even suggests a decline from nearly 52,000 vehicles that RIVN sold in 2024.
However, there’s reason to believe that Rivian’s outlook will prove to be a bit too conservative.
Why? Because the EV company has recently opened orders for its commercial van that once was an exclusive product for Amazon only.
Versus its year-to-date high, Rivian stock is down more than 20% at the time of writing.
Should you invest in Rivian stock in 2025?
Investing in Rivian may be an exciting proposition for 2025 as its price-to-sales currently sits well below peers, including Lucid and Tesla.
Plus, the EV maker plans on introducing three new mass-market vehicles next year, all priced at less than $50,000.
The affordable offerings could help lift its sales just as they did for Tesla in 2020.
For investors, however, the related benefit could start to reflect in Rivian stock much sooner, perhaps as soon as the back half of this year.
That’s because markets usually don’t react retrospectively – they tend to be forward-looking instead.
That said, RIVN remains unattractive for income investors on the lookout for an additional source of passive income as it’s not yet a dividend stock.
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