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Rivian Share Price Up More Than 13% In Yesterdays Session. What Is On The Horizon?

Analyst Team trader
Updated 8 Mar 2024

California-based electric vehicle manufacturer Rivian Automotive Inc. has heightened competition in the electric vehicle (EV) market by revealing its new R2 SUV and showcasing the upcoming R3 crossover. This strategic move bolsters the company's product lineup as it takes on industry giant Tesla.

Rivian, known for its electric delivery vans for commercial consumers, is broadening its consumer-focused offerings. The company currently sells the R1T electric truck and the R1S SUV. Both models are at the premium end of the market, with the R1T starting at $69,900 and the R1S at $74,900. These vehicles provide direct competition to Tesla's upscale Model X and Model S, offering consumers high-end electric alternatives.

Rivian truck

The new R2 SUV represents Rivian's venture into more cost-effective territory. Starting at approximately $45,000, the R2 is poised to challenge Tesla's Model Y, which is priced slightly lower at $43,990. This pricing strategy is pivotal for Rivian as it seeks to capture a broader customer base by offering a more accessible entry point into the world of electric mobility without compromising on quality and performance.

Additionally, the showcased R3 crossover is set to further diversify Rivian's portfolio. Expected to be priced below the R2, it includes plans for a performance variant that could rival Tesla's Model 3 and its high-performance counterpart. The introduction of the R3 could significantly shake up the market by providing consumers with a performance-oriented EV crossover at a competitive price point.

Despite these ambitious expansions, Rivian has yet to announce a direct competitor for Tesla's Cybertruck. The Cybertruck, with its distinctive design and higher price, remains a unique offering in the EV market. Rivian's decision to forgo a rival model suggests a focus on consolidating its position in the existing categories rather than extending into Tesla's more experimental segment.

Tesla CEO Elon Musk has expressed skepticism regarding Rivian's longevity in the competitive EV industry, speculating on potential financial difficulties that could lead to its downfall. Although acknowledging the newcomer's design capabilities, Musk's doubting stance reflects the cutthroat nature of the EV market with its high costs of innovation and production. We didn't really expect he would offer too glowing an endorsement on his competitors though did we?

Rivian's product line up expansions mark a significant moment in the EV market dynamic, demonstrating the company's resilience and determination to carve out a substantial share of the EV space. Rivian share price (NASDAQ: RIVN) ended the day Thursday more than 13% to the good at $12.51. In the post market, the stock held up at $12.88 to close out a great day for shareholders.

Also on the day was an announced saving of some $2.25billion. Made possible by moving production of the R2 from Georgia to the company’s plant in Normal, Illinois, there is a little more momentum building here which will be welcome news. With the 52 week high being a lofty $28.06, and the early days of the IPO price long in the rearview mirror, investors would be wiser to look forward for pricing guidelines with the average target on the street being a more modest $17.70. Whilst seeming modest in comparison to earlier highs when the EV hype was firing, it is worth noting that analyst estimates still reflects upside of close to 40%.

Maybe Rivian will have another day in the sun after all.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.