MW Tesla's stock has an AI halo. Can Rivian's get the same treatment?
By William Gavin
Rivian could show off new self-driving technology at its Autonomy and AI Day on Thursday
Rivian is expected to showcase self-driving technology at a Thursday event.
Rivian Automotive is set to make the case this week for why it's set to be a leader in autonomous driving - and why investors should think of it as more than just an electric-vehicle manufacturer.
That sort of messaging has worked out reasonably well for Tesla $(TSLA)$, as its stock has held up despite sales struggles in numerous major markets, thanks to Wall Street's focus on the potential of its self-driving technology and budding robotaxi business.
See more: Why Tesla's stock could be a top pick for 2026, even as EV sales struggle
Now Rivian (RIVN) is gearing up for its own Autonomy and AI Day on Thursday. Although the company hasn't detailed exactly what to expect, Chief Executive RJ Scaringe has said the company will discuss its "hardware and software roadmap" and vision for autonomy.
"Over the long term, we expect the industry to be fully electric, autonomous and software defined," Scaringe said on a November earnings call.
Tom Narayan, an analyst at RBC Capital Markets, wrote in a recent note that Rivian will likely focus on hands-off, eyes-off driving. That would be a major improvement on Rivian's current driver-assistance system - which made its debut in March - which only allows for hands-off driving on certain highways.
Hands-off, eyes-off driving is an attractive prospect for both companies and consumers alike, which is why several automakers are working on it, including General Motors $(GM)$ and Lucid $(LCID)$. Currently, Mercedes-Benz (XE:MBG) is the only automaker with a commercial version of that software. But it's only available under certain conditions in California and Nevada.
Don't miss: Tesla has 'solved' autonomy by bucking an industry trend, says this bull
The current version of Tesla's (TSLA) Full Self-Driving system is a hands-off, eyes-on system, although the company has moved toward loosening its restrictions on driver attentiveness. Its latest update now allows consumers to text and drive in some situations.
"That ability to have your time back" can change your life, Scaringe said in a recent interview with Automotive News, describing how customers could read books or rest instead of focusing on driving.
"It's going to be very hard, I think, for customers to accept anything less than" not having to focus as much on driving, Scaringe added.
But it will take some time to get there.
Deutsche Bank analysts led by Edison Yu expect Rivian to launch what Scaringe has called Universal Hands-Free (UHF) in 2026. Scaringe said last month that he tried out UHF during a two-hour trip, during which his Rivian vehicle drove "completely on its own."
Later in the decade, the analysts expect Rivian to offer its eyes-off capabilities in "most" cases.
Rivian's current software is included with its vehicles, but the company has talked about adopting a subscription model for premium features. Narayan said such a model would likely be similar to Tesla's model, but "perhaps with lower pricing." Tesla charges customers $99 per month to use its FSD, although it also offers a one-time-payment option.
That could help bring in revenue for Rivian, which has in the past made investors nervous over how fast it burns through cash. In a recent note, Morgan Stanley analysts forecast that Rivian likely won't generate positive cash flow until 2028.
Analysts also expect Rivian to offer demonstrations of its autonomous-driving technology and provide more details on the intricacies of its hardware and software, which it designs in-house, as well as its data collection.
Deutsche Bank also raised the possibility of Rivian entering a deal to allow its technology to be used for robotaxis. Uber Technologies (UBER) and Lyft $(LYFT)$, for example, have teamed up with multiple companies to put robotaxis on their ride-share networks.
While Rivian hasn't completely written off robotaxis, Scaringe has been more focused on personally owned vehicles, which, he has said, represent a bigger opportunity for the company. During a recent call with investors, he said that there are "lots of market opportunities" involving work with ride-hailing operators.
A 'more critical' matter
Although Rivian's AI efforts could be valuable, some analysts are eyeing something more tangible: a product launch primed for 2026.
"[W]hile we see Dec. 11's event as important, being able to scale R2/R3 profitably will be far more critical for investors," Narayan said in a note, referring to Rivian's coming electric vehicles.
The R2 is designed to be a midsize SUV that's more affordable than Rivian's current lineup of expensive EVs. The R2 is expected to cost $45,000 for the base model when it launches next year, or almost $28,000 less than the R1T. Additional details on the available trims will be announced next year.
Deliveries are expected to start in the first half of 2026, but volume is expected to ramp up in the second half of the year, an executive said in November.
The R2 will be made at Rivian's existing plant in Illinois, while a Georgia facility that will produce both the R2 and the planned R3 crossover is under construction. Work on the Georgia plant won't be completed until late 2028.
"I think for the first time with R2, you'll have a choice that's highly compelling that's not a Tesla," Scaringe said in October.
More from MarketWatch: This Tesla move could help the EV maker shake a sales slump
-William Gavin
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 10, 2025 08:35 ET (13:35 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments