Down 22% This Year, Is Rivian Stock Overdue for a Rally?

Rivian (NASDAQ: RIVN) has done a lot in a short period of time. Given that it is a money-losing start-up in the capital-intensive automotive sector, each step it has taken has been a make-or-break moment. So far, the company has executed very well. But the next make-or-break moment is already here, and it is a big one. The year-to-date stock decline of 22% is a sign that Wall Street is worried. There's a good reason for that concern.

What has Rivian achieved?

Rivian has designed an award-winning all-electric truck. It has built a factory to produce that truck at scale. And it has produced a gross profit, selling the trucks it builds for more than it costs to build them. These are impressive achievements, and the company should be proud. However, it is still losing money, so it isn't yet a sustainable business.

Image source: Getty Images.

The next big step in that direction is already here, however, as the company is launching a mass-market electric vehicle, called the R2. Until now, Rivian's trucks have been focused on high-end customers and business customers (delivery trucks). It needs to spread its costs over more vehicles if it is going to be sustainably profitable. Notably, it is traveling the same path as Tesla (NASDAQ: TSLA), which is now a sustainably profitable carmaker.

Rivian: There's no way to know what happens until it happens

Following in Tesla's footsteps is a good approach, but there's an important difference today: every major automaker now produces EVs. When Tesla built its business, it was basically the only EV game in town. The bar is much higher today than it was. And the drop in Rivian's stock price so far in 2026 reflects Wall Street's concern about the launch of the R2.

That launch is taking place now, so the company's second-quarter earnings results won't reflect the impact of the R2. It may provide an early update on how well the new car is selling, but it will likely be another quarter before the revenues from those sales start to show up on the income statement. And even then, it will take several quarters, if not longer, to get a good read on whether or not consumers like the truck. It is a waiting game.

The R2 is big for Rivian

If the R2 is well-received, Rivian could see its stock rally. If the R2 isn't well received, Rivian could have a hard time convincing Wall Street that it will ever become a sustainably profitable company. The stock would likely fall. Most investors should probably stay on the sidelines here until there's more clarity on the R2's success. This is an aggressive growth investment that only the most risk-tolerant investors should own.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.