Rivian Automotive, Inc.

Rivian Automotive, Inc.

Formerly	Mainstream Motors Avera Automotive
Type	Public company
Traded as	Nasdaq: RIVN (Class A) Russell 1000 component
ISIN	[https://stockhub.co/index.php?title=Toollabs:isin/&language=en&isin=US76954A1034 US76954A1034]
Industry	Automotive Energy storage
Founded	June 2009 (2009-06)
Founder	R. J. Scaringe
Headquarters	Irvine, California , U.S.
Number of locations	51 service centers (2022)
Area served	Canada United States
Key people	R. J. Scaringe (CEO)
Products	Electric vehicles Batteries
Production output	24,337 vehicles (2022)
Services	Electric vehicle charging Vehicle insurance
Revenue	US$1.66 billion (2022)
Operating income	US$−6.8 billion (2022)
Net income	US$−6.7 billion (2022)
Total assets	US$17.9 billion (2022)
Total equity	US$13.8 billion (2022)
Owner	Amazon (18.1%) Abdul Latif Jameel (12.7%)
Number of employees	14,122 (December 2022)
Footnotes / references

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

Rivian is an electric vehicle (EV) maker that is still in its early stages of growth. The company is facing a number of macro-economic challenges, including:

• Rising raw material costs: The price of lithium, a key component in EV batteries, has been rising sharply in recent months. This is due to a number of factors, including increased demand from the EV industry and supply chain disruptions. Rising raw material costs could put pressure on Rivian's margins and make it more difficult for the company to compete with established automakers.
• Inflation: Inflation is also a major concern for Rivian. The company's costs are rising across the board, from labor to transportation. This could make it more difficult for Rivian to maintain its current pricing, which could hurt demand for its vehicles.
• Supply chain disruptions: The global supply chain has been disrupted by the COVID-19 pandemic and the war in Ukraine. This has made it difficult for Rivian to get the parts it needs to build its vehicles. Supply chain disruptions could delay the launch of new models and make it more difficult for Rivian to meet demand.

Despite these challenges, Rivian is well-positioned to succeed in the long term. The company has a strong team of experienced automotive engineers and executives. Rivian also has a number of major partnerships, including one with Amazon, which has ordered 100,000 electric vans from the company.

If Rivian can overcome the challenges it faces in the near term, it has the potential to be a major player in the EV industry. The company is well-positioned to capitalize on the growing demand for EVs in the United States and around the world.

Here are some additional factors that could affect Rivian in the macro environment:

• Government policies: Government policies, such as subsidies for EVs and regulations on emissions, could have a significant impact on Rivian's business.
• Competition: The EV industry is becoming increasingly competitive, with new entrants entering the market all the time. Rivian will need to differentiate itself from its competitors in order to be successful.
• Consumer sentiment: Consumer sentiment towards EVs is also important. If consumers become more interested in EVs, it could boost demand for Rivian's vehicles.

Overall, the macro environment presents both challenges and opportunities for Rivian. The company will need to carefully manage these factors in order to be successful in the long term.

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.

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

Income Statement

Breakdown	TTM	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Total Revenue	1,658,000	1,658,000	55,000	0	0
Operating Revenue	1,658,000	1,658,000	55,000	0	0
Cost of Revenue	4,781,000	4,781,000	520,000	-	0
Gross Profit	-3,123,000	-3,123,000	-465,000	-	0
Operating Expense	3,733,000	3,733,000	3,755,000	1,021,000	409,000
Selling General and Administrative	1,789,000	1,789,000	1,242,000	255,000	108,000
Research & Development	1,944,000	1,944,000	1,850,000	766,000	301,000
Other Operating Expenses	-	-	663,000	-	-
Operating Income	-6,856,000	-6,856,000	-4,220,000	-1,021,000	-409,000
Net Non Operating Interest Income Expense	90,000	90,000	-26,000	2,000	-16,000
Interest Income Non Operating	193,000	193,000	3,000	10,000	18,000
Interest Expense Non Operating	103,000	103,000	29,000	8,000	34,000
Other Income Expense	18,000	18,000	-442,000	1,000	-1,000
Gain on Sale of Security	-	-	-441,000	-	-
Other Non Operating Income Expenses	18,000	18,000	-1,000	1,000	-1,000
Pretax Income	-6,748,000	-6,748,000	-4,688,000	-1,018,000	-426,000
Tax Provision	4,000	4,000	0	0	0
Net Income Common Stockholders	-6,752,000	-6,752,000	-4,688,000	-2,506,000	-426,000
Net Income	-6,752,000	-6,752,000	-4,688,000	-1,018,000	-426,000
Net Income Including Non-Controlling Interests	-6,752,000	-6,752,000	-4,688,000	-1,018,000	-426,000
Net Income Continuous Operations	-6,752,000	-6,752,000	-4,688,000	-1,018,000	-426,000
Otherunder Preferred Stock Dividend	0	0	0	1,488,000	0
Diluted NI Available to Com Stockholders	-6,752,000	-6,752,000	-4,688,000	-2,506,000	-426,000
Basic EPS	-	-7.4	-5.21	-1.41	-0.59
Diluted EPS	-	-7.4	-5.21	-1.41	-0.59
Basic Average Shares	-	913,000	900,000	723,000	723,000
Diluted Average Shares	-	913,000	900,000	723,000	723,000
Total Operating Income as Reported	-6,856,000	-6,856,000	-4,220,000	-1,021,000	-409,000
Total Expenses	8,514,000	8,514,000	4,275,000	1,021,000	409,000
Net Income from Continuing & Discontinued Operation	-6,752,000	-6,752,000	-4,688,000	-1,018,000	-426,000
Normalized Income	-6,752,000	-6,752,000	-4,247,000	-1,018,000	-426,000
Interest Income	193,000	193,000	3,000	10,000	18,000
Interest Expense	103,000	103,000	29,000	8,000	34,000
Net Interest Income	90,000	90,000	-26,000	2,000	-16,000
EBIT	-6,645,000	-6,645,000	-4,659,000	-1,010,000	-392,000
EBITDA	-5,993,000	-	-	-	-
Reconciled Cost of Revenue	4,781,000	4,781,000	520,000	-	0
Reconciled Depreciation	652,000	652,000	197,000	29,000	7,000
Net Income from Continuing Operation Net Minority Interest	-6,752,000	-6,752,000	-4,688,000	-1,018,000	-426,000
Total Unusual Items Excluding Goodwill	-	-	-441,000	-	-
Total Unusual Items	-	-	-441,000	-	-
Normalized EBITDA	-5,993,000	-5,993,000	-4,021,000	-981,000	-385,000
Tax Rate for Calcs	0	0	0	0	0
Tax Effect of Unusual Items	0	0	0	0	0

Balance Sheet

Breakdown	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Total Assets	17,876,000	22,294,000	4,602,000	2,633,000
Current Assets	13,130,000	18,559,000	3,016,000	2,293,000
Cash, Cash Equivalents & Short Term Investments	11,568,000	18,133,000	2,979,000	2,264,000
Cash And Cash Equivalents	11,568,000	18,133,000	2,979,000	2,264,000
Cash	2,604,000	-	-	-
Cash Equivalents	8,964,000	-	-	-
Receivables	102,000	26,000	-	-
Accounts receivable	102,000	26,000	-	-
Inventory	1,348,000	274,000	-	-
Raw Materials	949,000	-	-	-
Finished Goods	399,000	-	-	-
Other Current Assets	112,000	126,000	37,000	29,000
Total non-current assets	4,746,000	3,735,000	1,586,000	340,000
Net PPE	4,088,000	3,411,000	1,525,000	313,000
Gross PPE	4,971,000	3,644,000	1,563,000	323,000
Properties	0	0	0	0
Land And Improvements	636,000	429,000	88,000	9,000
Machinery Furniture Equipment	2,865,000	2,036,000	139,000	36,000
Other Properties	330,000	228,000	80,000	-
Construction in Progress	843,000	760,000	1,205,000	271,000
Leases	297,000	191,000	51,000	7,000
Accumulated Depreciation	-883,000	-233,000	-38,000	-10,000
Other Non Current Assets	658,000	324,000	61,000	27,000
Total Liabilities Net Minority Interest	4,077,000	2,780,000	5,986,000	3,008,000
Current Liabilities	2,424,000	1,313,000	611,000	185,000
Payables And Accrued Expenses	2,154,000	1,150,000	533,000	164,000
Payables	1,000,000	483,000	90,000	27,000
Accounts Payable	1,000,000	483,000	90,000	27,000
Current Accrued Expenses	1,154,000	667,000	443,000	137,000
Current Debt And Capital Lease Obligation	270,000	89,000	50,000	3,000
Current Debt	-	-	28,000	-
Other Current Borrowings	-	-	28,000	-
Current Capital Lease Obligation	270,000	89,000	22,000	3,000
Current Deferred Liabilities	-	74,000	28,000	18,000
Current Deferred Revenue	-	74,000	28,000	18,000
Other Current Liabilities	-	-	22,000	3,000
Total Non Current Liabilities Net Minority Interest	1,653,000	1,467,000	5,375,000	2,823,000
Long Term Debt And Capital Lease Obligation	1,542,000	1,444,000	130,000	71,000
Long Term Debt	1,231,000	1,226,000	47,000	71,000
Long Term Capital Lease Obligation	311,000	218,000	83,000	0
Preferred Securities Outside Stock Equity	-	0	5,244,000	2,750,000
Other Non Current Liabilities	111,000	23,000	1,000	2,000
Total Equity Gross Minority Interest	13,799,000	19,514,000	-1,384,000	-375,000
Stockholders' Equity	13,799,000	19,514,000	-1,384,000	-375,000
Capital Stock	1,000	1,000	0	0
Preferred Stock	0	-	-	-
Common Stock	1,000	1,000	0	0
Additional Paid in Capital	26,926,000	25,887,000	302,000	293,000
Retained Earnings	-13,126,000	-6,374,000	-1,686,000	-668,000
Gains Losses Not Affecting Retained Earnings	-2,000	-	0	0
Other Equity Adjustments	-2,000	-	-	-
Total Capitalization	15,030,000	20,740,000	-1,337,000	-304,000
Common Stock Equity	13,799,000	19,514,000	-1,384,000	-375,000
Capital Lease Obligations	581,000	307,000	105,000	3,000
Net Tangible Assets	13,799,000	19,514,000	-1,384,000	-375,000
Working Capital	10,706,000	17,246,000	2,405,000	2,108,000
Invested Capital	15,030,000	20,740,000	-1,309,000	-304,000
Tangible Book Value	13,799,000	19,514,000	-1,384,000	-375,000
Total Debt	1,812,000	1,533,000	180,000	74,000
Share Issued	926,000	900,000	852,859	852,859
Ordinary Shares Number	926,000	900,000	852,859	852,859

Cash Flow Statement

Breakdown	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Operating Cash Flow	-5,052,000	-2,622,000	-848,000	-353,000
Cash Flow from Continuing Operating Activities	-5,052,000	-2,622,000	-848,000	-353,000
Net Income from Continuing Operations	-6,752,000	-4,688,000	-1,018,000	-426,000
Operating Gains Losses	-	441,000	-	-
Depreciation Amortization Depletion	652,000	197,000	29,000	7,000
Depreciation & amortization	652,000	197,000	29,000	7,000
Asset Impairment Charge	920,000	95,000	-	0
Stock based compensation	987,000	570,000	-	0
Other non-cash items	82,000	1,120,000	41,000	37,000
Change in working capital	-941,000	84,000	100,000	29,000
Change in Receivables	-76,000	-20,000	-	-16,000
Changes in Account Receivables	-76,000	-20,000	-	-16,000
Change in Inventory	-1,657,000	-369,000	-	0
Change in Payables And Accrued Expense	623,000	461,000	121,000	43,000
Change in Other Current Assets	-36,000	-89,000	-31,000	-13,000
Change in Other Current Liabilities	205,000	55,000	0	1,000
Change in Other Working Capital	-	46,000	10,000	14,000
Investing Cash Flow	-1,369,000	-1,794,000	-914,000	-199,000
Cash Flow from Continuing Investing Activities	-1,369,000	-1,794,000	-914,000	-199,000
Capital Expenditure Reported	-1,369,000	-1,794,000	-914,000	-199,000
Net Other Investing Changes	-	-	-	-2,000
Financing Cash Flow	99,000	19,828,000	2,500,000	2,811,000
Cash Flow from Continuing Financing Activities	99,000	19,828,000	2,500,000	2,811,000
Net Issuance Payments of Debt	0	3,640,000	0	61,000
Net Long Term Debt Issuance	0	3,640,000	0	61,000
Long Term Debt Issuance	0	3,726,000	0	61,000
Long Term Debt Payments	-	-86,000	-	0
Net Common Stock Issuance	102,000	16,188,000	2,500,000	2,750,000
Common Stock Issuance	102,000	16,188,000	2,506,000	2,750,000
Common Stock Payments	-	-	-6,000	0
Net Other Financing Charges	-3,000	-	-	-
End Cash Position	12,099,000	18,423,000	3,011,000	2,273,000
Changes in Cash	-6,322,000	15,412,000	738,000	2,259,000
Effect of Exchange Rate Changes	-2,000	-	-	-
Beginning Cash Position	18,423,000	3,011,000	2,273,000	14,000
Interest Paid Supplemental Data	88,000	2,000	4,000	5,000
Capital Expenditure	-1,369,000	-1,794,000	-914,000	-199,000
Issuance of Capital Stock	102,000	16,188,000	2,506,000	2,750,000
Issuance of Debt	0	3,726,000	0	61,000
Repayment of Debt	-	-86,000	-	0
Repurchase of Capital Stock	-	-	-6,000	0
Free Cash Flow	-6,421,000	-4,416,000	-1,762,000	-552,000

Valuation

Assumptions

This research report aims to evaluate the valuation of Rivian based on available financial data for the years 2021 and 2022. Given the absence of historical data, which complicates the forecasting of financial statements using traditional growth and percentage analysis, the research team has opted to utilize Comparable analysis for making assumptions. In constructing the Discounted Cash Flow (DCF) model, Tesla has been chosen as the comparable company.

The following assumptions have been employed in the DCF model:

These assumptions are based on careful analysis and consideration of relevant factors to ensure a comprehensive and accurate evaluation of Rivian's valuation. It is essential to highlight that these assumptions are subject to change based on future developments and additional data availability. The research team remains committed to refining the analysis as new information becomes accessible, thus ensuring the most up-to-date and reliable valuation for Rivian.

Assumptions	Value
Long-term growth rate	4.0%
Revenue Growth	41.2%
EBITDA	15.6%
Depreciation	6.6%
Total Cash	36.8%
Account Receivables	4.6%
Inventories	13.5%
Accounts Payable	18.0%
Capital Expenditure	10.0%
Tax Rate	7.0%

DCF Analysis

Operating Data - (USD 'MM)
Year	2020	2021	2022	2023	2024	2025	2026	2027
A/F	Actual	Actual	Actual	Forecast	Forecast	Forecast	Forecast	Forecast
Revenue	-	55	1,658	2,341	3,306	4,668	6,591	9,306
Revenue Growth  %	0.0%	0.0%	2914.5%	41.2%	41.2%	41.2%	41.2%	41.2%
EBITDA	(1,021)	(4,220)	(6,856)	365	516	728	1,028	1,452
EBITDA, %	0.0%	-7672.7%	-413.5%	15.6%	15.6%	15.6%	15.6%	15.6%
Depreciation	29	197	652	155	218	308	435	614
Depreciation, %	0.0%	358.2%	39.3%	6.6%	6.6%	6.6%	6.6%	6.6%
EBIT	(1,050)	(4,417)	(7,508)	211	298	420	593	838
EBIT, %	0.0%	-8030.9%	-452.8%	9.0%	9.0%	9.0%	9.0%	9.0%
Balance Sheet Data - (USD 'MM)
Year	2020	2021	2022	2023	2024	2025	2026	2027
A/F	Actual	Actual	Actual	Forecast	Forecast	Forecast	Forecast	Forecast
Total Cash	-	18,133	11,568	862	1,216	1,718	2,425	3,425
Total Cash, %	0.0%	32969.1%	697.7%	36.8%	36.8%	36.8%	36.8%	36.8%
Account Receivables	-	26	102	108	152	215	303	428
Account Receivables, %	0.0%	47.3%	6.2%	4.6%	4.6%	4.6%	4.6%	4.6%
Inventories	-	274	1,348	316	446	630	890	1,256
Inventories, %	0.0%	498.2%	81.3%	13.5%	13.5%	13.5%	13.5%	13.5%
Accounts Payable	-	483	1,000	421	595	840	1,186	1,675
Accounts Payable, %	0.0%	878.2%	60.3%	18.0%	18.0%	18.0%	18.0%	18.0%
Capital Expenditure	-	(1,794)	(1,369)	(234)	(331)	(467)	(659)	(931)
Capital Expenditure, %	0.0%	3261.8%	82.6%	10.0%	10.0%	10.0%	10.0%	10.0%
Build Up Free Cash Flow - (USD 'MM)
Year	2020	2021	2022	2023	2024	2025	2026	2027
A/F	Actual	Actual	Actual	Forecast	Forecast	Forecast	Forecast	Forecast
Revenue	-	55	1,658	2,341	3,306	4,668	6,591	9,306
EBITDA	(1,021)	(4,220)	(6,856)	365	516	728	1,028	1,452
EBIT	(1,050)	(4,417)	(7,508)	211	298	420	593	838
Tax Rate, %	0.0%	-9.4%	-0.1%	7.0%	7.0%	7.0%	7.0%	7.0%
EBIAT	(1,047)	(4,833)	(7,512)	196	277	391	552	779
Depreciation	29	197	652	155	218	308	435	614
Accounts Receivable	-	(26)	(76)	(6)	(44)	(63)	(88)	(125)
Inventories	-	(274)	(1,074)	1,032	(130)	(184)	(260)	(367)
Accounts Payable	-	483	517	(579)	174	245	346	489
Capital Expenditure	-	(1,794)	(1,369)	(234)	(331)	(467)	(659)	(931)
UFCF	(1,018)	(6,247)	(8,862)	564	163	231	326	460
WACC, %	0.0%	0.0%	0.0%	14.9%	14.9%	14.9%	14.9%	14.9%
PV UFCF	0	0	0	491	124	152	187	230

Valuation - (USD 'MM)
Terminal Value (Perpetuity Growth method) - (USD 'MM)			Intrinsic Value	0
Long-term growth rate, %	4.0%		Enterprise Value - (USD 'MM)	3,385
WACC, %	14.9%		Net Debt - (USD 'MM)	-9,756
Free cash flow (t + 1)	478		Equity Value - (USD 'MM)	13,141
Terminal Value	4,401		Shares Outstanding, MM	913
Present Value of Terminal Value	2,201		Equity Value Per Share, USD	14.39

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.