Rivian Automotive, Inc.: Difference between revisions
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== Financials == | == Financials == | ||
== Valuation == | |||
== Technical Analysis == | == Technical Analysis == | ||
Revision as of 00:59, 27 July 2023
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| Formerly |
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|---|---|
| Type | Public company |
| |
| ISIN | [https://stockhub.co/index.php?title=Toollabs:isin/&language=en&isin=US76954A1034 US76954A1034] |
| Industry | |
| Founded | June 2009 |
| Founder | R. J. Scaringe |
| Headquarters | , U.S.[1] |
Number of locations | 51 service centers (2022) |
Area served | Canada United States |
Key people |
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| Products | |
Production output |  24,337 vehicles (2022) |
| Services | |
| Revenue | US$1.66 billion (2022) |
 US$−6.8 billion (2022) | |
| US$−6.7 billion (2022) | |
| Total assets | US$17.9 billion (2022) |
| Total equity | US$13.8 billion (2022) |
| Owner |
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Number of employees | 14,122 (December 2022) |
| Footnotes / references [4][5] | |
Rivian Automotive, Inc. designs, develops, manufactures, and sells electric vehicles and accessories. The company offers five-passenger pickup trucks and sports utility vehicles. It provides Rivian Commercial Vehicle platform for electric Delivery Van with collaboration with Amazon.com. The company sells its products directly to customers in the consumer and commercial markets. Rivian Automotive, Inc. was founded in 2009 and is based in San Jose, California.
Macro Analysis
Industry Overview
Electric Vehicle Market
The automotive industry is undergoing a transformation as a result of increased environmental awareness and the need for sustainable transportation solutions. Electric vehicles (EVs) have emerged as a critical component of the industry's future as part of this shift.
The global market for electric vehicles has experienced significant growth over the past decade and projected to grow at a compound annual growth rate of 10.07% between 2023 and 2028. Factors such as advancements in battery technology, government incentives, and increasing environmental awareness have contributed to the rising adoption of EVs. Governments around the world are actively promoting the adoption of EVs through various policy measures, such as the plug-in grant in the UK and tax incentives in the US.
Competitive Landscape
The marketplace for electric vehicles is highly competitive, with both established automotive titans and new entrants competing for market share. The market is heavily dominated by Tesla, which exclusively produces electric vehicles. As one of the market's pioneering electric car manufacturers, Tesla has played a vital role in defining and popularising EVs. The success of the company encouraged other players to increase their efforts to compete in the growing EV industry.
Rivian also competes with traditional automakers, such as Volkswagen, that have recently begun to launch their own electric vehicle models. Established manufacturers have introduced electric cars into their existing lineups through utilising their experience, brand familiarity, and substantial distribution networks. Newer entrants, on the other hand, have the advantage of starting from scratch, allowing them to design cutting-edge electric vehicles without the limits of legacy technology.
Competitor Comparison
Competition in the electric automobile industry has been increasingly competitive over the past few years with an increasing trend of electrical transport due to sustainability, with sales of EV exceeding 10 million. The main competitors of Rivian are other electric car companies including Tesla, the Lucid group, and Li Auto.
Tesla
Tesla is known for being a pioneer in the EV market and was founded in 2003. It is the biggest EV company by market capitalisation with a market cap of 629.52 billion. It has wide range of electrical vehicles catering to various customer segments. The company has an automotive segment which includes the design, development, manufacturing, sales and leasing of electrical vehicles and automotive regulatory credit. The company has segments including Automotive, Energy Generation and Storage.
Lucid group Inc
Lucid Group Inc. is a technology and automotive company that focuses on designing, manufacturing, developing, and selling electric vehicles with a main focus on in-house technology innovation. They also develop energy storage systems for electric vehicles and supply automakers with battery systems for electric vehicles. They specialise in high-end electro-powered sports cars, with a market cap of 15.71 billion. They are best known for Lucid Air, with the second model Lucid Gravity SUV which is scheduled to launch in 2024.
Li Auto
Li Auto is a Chinese EV manufacturer, with a market cap of 23.21 billion. The company sells premium smart electric SUV vehicles as the main pioneer in China which has successfully commercialised extended range electrical vehicles in China. The company focuses on next-generation electric vehicle technology and smart vehicle solutions. The products have been categorised into SUV, MPV and sedan segments.
Company Snapshot and Operational Insight
Rivian is an automaker and automotive technology company that develops vehicles, products, and services related to sustainable transportation. They manufacture electric vehicles and are known for their two models, the R1T, an all-electric pickup truck, and the R1S, an all-electric SUV. Rivian also has a contract with Amazon to build electric delivery vans. They have a vertically integrated business model and technology platform, focus on customer experience, direct-to-customer relationships, and the ability to efficiently launch multiple vehicle platforms.
Market:
Rivian's market extends beyond just automotive manufacturing. They are involved across the spectrum of the consumer and commercial value chain, which includes third parties such as charging providers, vehicle service providers, vehicle remarketers, and traditional fleet management companies.
Board of Directors:
ESG (Environmental, Social, and Governance):
Rivian is committed to diversity, equity, inclusion, and belonging. They have operating principles that anchor their work for belonging, which includes representation, diverse teams, self-awareness, and equitable practices. They have developed a range of internal programs and offerings for their employees to foster a sense of belonging.
Rivian is also committed to responding effectively to climate change. They are one of the signatories to The Climate Pledge, committing to reaching net-zero carbon emissions by 2040. They aim to measure and report their GHG emissions, implement decarbonisation strategies, and power charging on the Rivian Adventure Network and Rivian Waypoints Network with 100% renewable energy.
Rivian's products are designed to reduce impact on the environment over their lifecycle. This includes incorporating sustainable materials, prioritizing energy efficiency, and recycling key materials. They also track and forecast the carbon footprint of design iterations throughout the product development process.
Rivian is subject to stringent and comprehensive federal, state, and local laws and regulations governing matters related to environmental protection, occupational health and safety, and the release or discharge of materials into the environment.
Rivian is facing increasing scrutiny related to their ESG practices and reporting. Investors, consumers, employees, and other stakeholders have focused increasingly on ESG practices and placed increasing importance on the implications and social cost of their investments, purchases, and other interactions with companies.
Financials
Valuation
Technical Analysis
In this section, the attractiveness of Rivian stock is considered based on various technical indicators over a given time period. As the indicators are quite short term and all data is up to 22nd July, this should be kept in mind when considering Rivian as an investment opportunity.
The first indicator is RSI which is an analysis of momentum. RSI indicators looks back at the average daily gain or loss of a security to represent how overbought or oversold a security is.
The next indicator is the Stochastic Oscillator, another momentum indicator comparing the closing price of the security to the lowest traded and highest traded price over 14 previous trading days. The indicator is also used to consider whether the security is over or under-valued.
StochRSI or Stochastic RSI, evaluates the RSI indicators with the Stochastric Oscillator formula allowing further sensitivity for the RSI momentum indicator. The indicator is less volatile than RSI in evaluating whether a security is overbought or oversold.
ADX – Average Directional Index measures the strength of a price movement. The indicator is based on the moving average of the rate of price changes in a given time period. It describes how strong a trend is in the price movement of the security and can be used to support any hypotheses.
Commodity Channel Index – the indicator measures the spread between the current price and the historic average price based on the number of given periods. This indicator is similar to Stochastic Oscillator, but the CCI is unbounded, and both show whether a security is overbought or oversold.
High Low Index – A simple moving average dividing new highs over the sum of new highs and new lows. The indicator measures the prevailing market trends and analyses broad indices such as the FTSE 100.
Ultimate Oscillator – Uses three different timeframes, weekly, biweekly, and monthly period. The weightage of the calculations increases with the more recent timeframes. The indicator fluctuates less compared to other momentum indicators due to incorporating various periods. A buy signal is generated when a bullish divergence is formed where the price of the security diverges from the value of the indicator. The oscillator should then rise above the divergence high and vice versa for the selling case.
Price Rate of Change – ROC measures the percentage change between the current price and the price of the security from a previous lookback period. If the price is on the upside, the indicator is positive, and vice versa.
| Rivian Technical Indicators | ||
| Name(period) | Value | Buy/Sell Signal |
| RSI(14) | 51.444 | Neutral |
| STOCH(9,6) | 35.189 | Sell |
| STOCHRSI(14) | 43.633 | Sell |
| ADX(14) | 23.092 | Sell |
| CCI(14) | 16.8438 | Neutral |
| Highs/Lows(14) | 0 | Neutral |
| Ultimate Oscillator | 45.969 | Sell |
| ROC | 1.772 | Buy |
Overall, the indicators above show 4 Sell indicators, 1 Buy indicators and 3 Neutral indicators. From the technical indicators, the consensus is to sell due to bearish trend in price movement as indicated by the Ultimate Oscillator and the momentum indicators such as STOCHRSI hinting to Rivian stock being overbought. However, the ADX indicators does show that this is a weak trend and must be kept in mind along with further analysis to decide whether to buy or sell Rivian.
Catalysts
Rivian has recently tripled EV production and deliveries in Q2 in 2023. Production was up 218% higher than a year ago, which made it to be the best quarter in the company’s history. Rivian had reported 12,640 units which is 183% higher than 2022.
Rivian had recently decided to switch to Tesla’s North American Charging standard charging connector (NACS) starting 2025, to leverage the charging infrastructure that Tesla has built. This is a stride towards standardizing EV charging infrastructure and potentially capitalizing operational efficiency and customer convenience, as Tesla Super chargers account for 60% of the fast chargers available in the United States according to the U.S. Department of Energy.
Rivian electric delivery vans are beginning to expand into Europe through Amazon, as electric vans will be used to deliver packages among major cities including Munich following Amazon’s announcement to electrify the European transportation network, reduce carbon emissions and reaching net-zero by 2040. Amazon aims to have 100,000 electric delivery vehicles from Rivian globally by 2030.
Risk
As with any investment, investing in Rivian carries a level of risk. In order to make an informed investment decision, it is important to consider the key risks associated with the company.
Risks Related to the Ability to Grow the Business
- Rivian is up against established vehicle manufacturers and new competitors in the automobile sector, particularly in the electric vehicle segment. Increased competition may result in decreased market share and pricing pressures, reducing Rivian's profitability.
- Rivian's success relies on sustained and growing consumer demand for electric vehicles. Factors such as government regulations, consumer preferences, and the availability of charging infrastructure can impact demand and affect Rivian's sales and market penetration.
- Rivian is in the early stages of vehicle production and delivery, which may cause delays, production inefficiencies, or quality control issues.
- Rivian may be affected by the macroeconomic conditions resulting form the global COVID-19 pandemic.
- Rivian sources components for its cars through a complex global supply chain. Supply chain disruptions, such as component shortages, quality concerns, or cost rises, may have an impact on Rivian's production capability and overall operations.
Risks Related to the Company's Operations
- Technical flaws, safety concerns, manufacturing defects, or failures to satisfy quality standards can result in expensive recalls, damage to reputation, and legal ramifications.
- Negative publicity, quality issues, or product recalls could harm consumer trust, impact sales, and affect Rivian's long-term prospects.
- Rivian is exposed to fluctuations in currency exchange rates.
- Rivian’s operations may be affected by events out of its control, such as war and natural disasters.
- Legal disputes and product liability claims could result in restrictions on Rivian’s operations.
Risks Related to Government Laws and Regulations
- Changes in government policies, such as subsidies or laws governing electric vehicles, may have an impact on Rivian's sales and market competitiveness.
- Rivian is subject to evolving laws and regulations that may impose substantial costs, legal prohibitions, or unfavourable changes on its operations or products.
Risks Related to the Ownership of the Company's Securities
- The trading price of Rivian's securities, once publicly traded, may be subject to significant volatility, as shown historically.
- Market conditions, investor happiness, and company-specific news can all have an impact on the stock price.
- The sale of shares by insiders, including executives and early investors, can influence the stock price.