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Rivian’s Stock has already had a wild week, but the story hasn’t changed

Shares of the electric vehicle (EV) manufacturer. Rivian automotive industry (NASDAQ: RIVN) fell on Wednesday after rising at the start of the week due to the brief revival of interest in meme stocks. At the close of trading, Rivian was down about 8.9% from Tuesday’s close, but still up about 2% since late last week.

The meme stock rebound faded on Wednesday

For followers of this was already a whole week ago meme stocks – the group of heavily shorted stocks that surged in value earlier this decade after aggressive promotion by social media personalities and others hoping to trigger short squeezes.

The group experienced a brief revival on Monday and Tuesday Reddit user who came to prominence in the initial run and was posted on social media for the first time in about three years.

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Rivian, as well as several others EV companies, had a moment as a meme stock. It had a huge run-up shortly after the car manufacturer’s IPO in late 2021, which briefly gave Rivian – which had only just begun production of its first vehicle – a market capitalization of more than $100 billion.

Rivian is out of the hype phase and in the rut

Many things have changed since then. Although Rivian is now an established EV brand and has shipped approximately 100,000 vehicles, its market capitalization of $10.2 billion is a fraction of what it was at its peak.

Why? Many reasons. Among them: Reality has set in. Rivian is nowhere near sustainable profitability, and getting there will be a costly grind.

Currently, Rivian is aiming to complete development of the first vehicle on its new, smaller and cheaper platform. The company has told investors that it expects production of that vehicle, the R2 SUV, to begin in the first half of 2026.

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Rivian’s path to profitability is clear: it’s just long

There’s a good chance that the $45,000 R2 – and the even smaller R3 that will follow – will be the vehicles that give Rivian the scale to become profitable in the long term. And we should note that Rivian is not in immediate danger of going bankrupt: the company recently confirmed that it has enough cash on hand to get the R2 into production, and is working hard to reduce costs in the meantime.

CEO RJ Scaringe and his team are doing almost everything right. But Rivian investors waiting for a real return to rocket-like share price growth will likely have to wait at least a few more years.

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John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Rivian’s Stock has already had a wild week, but the story hasn’t changed was originally published by The Motley Fool

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