Al Root
Rivian investors reacted with caution on Thursday after the electric vehicle maker hosted its first autonomy and artificial intelligence day. The company has big plans to integrate AI into its products.
Shares traded as low as $15.73 and closed at $16.43, down 6.1%, while the S&P 500 and Dow Jones Industrial Average gained 0.2% and 1.3%, respectively.
It isn't clear what concerned investors. The itself event was positive: Rivian said that it plans to use AI computing to develop self-driving cars. The goal is truly hands-free autonomous driving that Rivian will sell to drivers on a subscription basis.
It's a very Tesla-like approach; the Elon Musk-led company has a robotaxi business and sells its highest level driver assistance call, Full-Self Driving, for about $100 a month. (So is the idea of hosting events to showcase AI or autonomy excellence.)
The company also unveiled its "first in-house Rivian autonomy processor, " said CEO R.J. Scaringe. That processor goes into Rivian's onboard compute platforms. Powerful computing in a car is another thing that Tesla has.
Investors might be a little worried about how much it will cost to develop self-driving cars. Autonomous driving hasn't been cheap to develop, and companies including Ford Motor and General Motors have essentially backed away from the type of driving that Alphabet's robotaxi company Waymo and Tesla have achieved.
Cash is also essential for Rivian -- which isn't profitable yet. Wall Street doesn't project positive free cash flow until 2029. Analysts tracked by FactSet expect Rivian to use almost $9 billion in cash to build its business between 2025 and 2028.
Rivian and Tesla differ in the use of lidar, which is essentially laser-based radar. Rivian uses it, as does Waymo, while Tesla doesn't. Lidar adds cost, but that shouldn't be a reason for Rivian's stock to underperform.
Through Thursday trading, Rivian stock was up 25% year to date, rising despite falling EV sales estimates and uncertain EV policy.
President Donald Trump removed the $7,500 federal EV purchase tax credit at the end of September. That's going to be a headwind to sales in the fourth quarter and beyond. Now, Wall Street projects Rivian deliveries of about 66,000 in 2026, down from projections of about 97,000 vehicles a year ago.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
December 11, 2025 17:08 ET (22:08 GMT)
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