Is It Time to Buy Rivian After Uber Partnership?

Rivian Automotive (NASDAQ: RIVN) added to its impressive list of partnerships when it recently struck a deal with ride-share leader Uber Technologies (NYSE: UBER). The deal will help the electric vehicle (EV) maker fund its autonomous driving ambitions.

Under the agreement, Uber will invest up to $1.25 billion in Rivian, including $300 million immediately after the deal clears regulatory approval. As part of the agreement, Uber will buy 10,000 autonomous versions of Rivian's R2 vehicles with an option to purchase 40,000 more starting in 2030. The R2 robotaxis will be available exclusively through Uber and are expected to be available in San Francisco and Miami in 2028.

Rivian is still currently developing its autonomous driving capabilities and expects to have hands-free navigation similar to Tesla's FSD supervised technology by the end of the year. It now looks like it plans to reach full autonomous level 4 driving by 2028, given the deal's timeline.

For the R2, the company will use a custom chip called the Rivian Autonomy Processor (RAP1), and it will eventually add a lidar sensor to go along with cameras and radar. As such, it is going after autonomy with a more sensor-rich stack like Alphabet's Waymo, as compared to Tesla, which has been taking a vision-first approach and not using lidar.

The agreement follows Rivian's penchant for striking partnerships with leading companies. Amazon became a major stakeholder in the company back in 2019, after it chose Rivian to be its electric delivery van provider.

Meanwhile, Rivian formed close ties with Volkswagen back in 2024, as the German automaker agreed to invest up to $5.8 billion in Rivian. The two companies also formed a joint venture that gave Volkswagen access to Rivian's important zonal electrical architecture that can significantly reduce the costs of EVs.

Image source: Getty Images.

Is it time to buy Rivian stock?

Rivian's software business has been a fast-growing, high-margin part of its business that has helped the company achieve positive gross margins. Now the company is really looking to shift this part of its business into overdrive by going after full autonomous driving and robotaxis in the next few years. I wouldn't be surprised if the company actually has a late-mover advantage with this as it learns from Waymo's and especially Tesla's mistakes.

At the same time, Rivian's new R2 vehicle is set to greatly expand the market for the brand's electric SUVs while improving its gross margin profile as it scales up production. The company has a solid reputation in the luxury end of the EV SUV market, so I think it can be successful in the upper middle range as well. Right now, Rivian has a lot of good things going on, which makes the stock a solid speculative buy in my view.

Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.