Rivian Automotive Share Price Forecast December 2021 – Time to Buy RIVN?

Shares of American electric vehicle automaker Rivian Automotive (NASDAQ: RIVN) are in the red today after closing at $102.87 as of December 28^th (19:58 EST). Rivian’s trucks have been described by the media as “one that astonishes with a quality of design, engineering, materials, and technology unmatched in trucks”.

Rivian Automotive – Technical Analysis

The financial statement released by Rivian Automotive indicates a market cap of $92.616 billion with total assets worth $8.488 billion.

Oscillators for Rivian such as Relative Strength Index (14)(48.86), Stochastic %K (14, 3, 3)(39.62),  Commodity Channel Index (20)(−51.65) and Average Directional Index (14)(8.43) are neutral at the moment. On the other hand, Exponential Moving Average (20)(109.08), Simple Moving Average (20)(109.18), Exponential Moving Average (30)(115.02) and Simple Moving Average (30)(116.26) are indicating a sell action.

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Recent Developments

Rivian is a relatively new entrant into the EV market, having just received 71,000 pre-orders for its truck and SUV combined. The company also has an additional order of 100,000 electric delivery vans from Amazon. The company is busy preparing to complete its delivery of pre-orders and delivery vans, having delivered its first SUV, R1S, in December. According to data as of December 15^th, Rivian has manufactured 652 vehicles and delivered 386 of them.

Although this means that Rivian is behind its initial target of around 1,200 vehicles for 2021, such delays aren’t too uncommon in the auto segment. Rivian’s credibility as a company got another boost thanks to the successful deliveries of the first few hundred vehicles.  The company is well on its way to expanding the annual capacity of its Normal, Illinois, facility from 150,000 to 200,000 vehicles. Rivian has also announced its second facility near Atlanta, Georgia, with an annual capacity of 400,000 units. Additionally, Rivian is also investing in its battery technology where it plans to make batteries in-house in addition to sourcing them from suppliers.

What’s most exciting about Rivian is the prominent investors that back it. For instance, Amazon holds a roughly 20% stake in Rivian as of Sept. 30. Amazon made its first investment in Rivian for $700 million in 2019. Other investors include Ford Motor Company (NYSE:F), which invested $500 million in Rivian in 2019 and now holds 12%. Other notable investors of Rivian include T.Rowe Price Associates, BlackRock, Third Point, Fidelity Management and Research Company, Dragoneer Investment Group, and Coatue.

Should You Buy RIVN Shares?

With a market cap of over $80 billion at the moment, Rivian is still big in spite of the shares being 48% below their all-time high. The majority of Rivian’s revenue comes from vehicle sales. But Rivian hopes to diversify its revenue via services including membership and software services, financing, insurance, charging, vehicle maintenance and repair, and its resale program. For instance, Rivian expects to generate a recurring subscription fee for its fleet management platform, FleetOS from commercial customers.

Rivian’s future appears bright, as it is enjoying surging demand for its vehicles. To tackle the growing demand, Rivian is investing $5 billion to build a new plant in Georgia. Production at the new plant is expected to start in 2024. The shares could surge if Rivian accomplishes what it is hoping. However, its still early to predict whether how strong will be the margins the company can realistically generate. The competition will only increase as leading players including Tesla, General Motors, and Ford will launch their own electric pickup trucks in the coming months. The best option is to stay away and observe how the company is tackling these challenges before investing.

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