Why Tesla’s rival Rivian’s stock is surging: Insights into market position and challenges

Rivian, the electric vehicle (EV) maker often seen as a rival to Tesla, saw its stock soar by an impressive 24.5% on Friday, marking the largest daily percentage gain since its public debut in November 2021.

The surge in Rivian stock was part of a broader rally in the automotive sector, as investors reacted positively to the company’s quarterly car delivery figures and the post-election market momentum.

Better-than-Expected Deliveries Fuel Investor Optimism

The rally in Rivian shares was spurred by the company’s fourth-quarter delivery data, which exceeded Wall Street expectations.

Rivian reported delivering 14,183 vehicles in the quarter, surpassing analysts’ consensus of approximately 13,000 units.

The company also met its 2024 delivery target of 51,579 vehicles, which was slightly above the 51,000 vehicles anticipated by analysts.

This better-than-expected performance helped drive the stock price to $16.49, its highest intraday value since July 2023, continuing the momentum that has characterized Rivian's post-election performance.

Broader Automaker Rally Lifts Tesla and Rivian Stocks

Rivian wasn’t the only automaker to see its stock rise on Friday. Larger automakers, including Ford, General Motors, and Tesla, also saw gains.

Tesla, in particular, saw an 8% recovery after a disappointing fourth-quarter delivery report earlier in the week.

The rebound in Tesla's stock came as analysts suggested the weak delivery numbers were likely a temporary blip.

In a broader market rally, the S&P 500 and Nasdaq both gained over 1%, driven in large part by the strength in the automotive sector.

Rivian’s 24.5% gain was the standout among EV makers, continuing a significant rally that began after the 2024 election results were in.

Impressive Post-Election Rally for Rivian

Rivian's stock has been on a remarkable upward trajectory since the election, rising 56% since Election Day.

This outperformance has put the company on par with Tesla, which saw a 63% increase during the same period, and artificial intelligence-focused defense contractor Palantir, which also saw a 56% increase.

This unexpected rally defies earlier concerns that President-elect Donald Trump’s anti-subsidy stance could hurt Rivian more than its competitors, particularly Tesla.

Initially, Trump’s stance on EV subsidies, including a potential repeal of federal tax credits for EVs, led to fears that Rivian and other EV players would be disproportionately affected.

Rivian’s stock briefly dropped by 8% after Trump’s victory, but the company has since rebounded, with its stock climbing steadily in the post-election period.

Rivian’s Market Position and Challenges

Despite the recent gains, Rivian remains far behind Tesla in terms of scale. The company’s market capitalization stands at just $17 billion, a fraction of Tesla's $1.3 trillion.

Rivian’s 52,000 vehicle deliveries in 2024 are also a small fraction of Tesla’s 1.79 million vehicles delivered last year.

Rivian has yet to report a profitable quarter, and it has posted losses in each of its 14 quarters since becoming a publicly traded company.

FAQs

Does Jeff Bezos own Rivian?

According to some reports Amazon owns about 10% to 15% stake in Rivian.

Did Volkswagen buy Rivian?

Under the new agreement, Volkswagen is investing $5.8 billion in Rivian, acquiring a 50% stake in their joint venture dedicated to advancing vehicle software development.