Is Rivian Stock a Millionaire Maker?

Rivian (NASDAQ: RIVN) is gearing up for its launch of a new electric vehicle model next year, and is coming off a year in which it met gross profit milestones that unlocked additional funding from its partnership with Volkswagen.

That's the good news.

The bad news is that Rivian narrowed its vehicle delivery guidance for the year, the electric vehicle industry just had its federal tax credits axed, and the company reported a gross loss again in the most recent quarter.

To say Rivian's challenges are increasing would be an understatement. Here's why Rivian stock likely won't make you a millionaire anytime soon.

Image source: Rivian.

Rivian's slow but steady progress

They say it's always best to start with the good news, so here's what Rivian has going for it right now, starting with the company's upcoming cheaper models. Rivian will begin selling its smaller R2 SUV next year and R3 crossover in 2027. The former will start at just $45,000 while the latter has an estimated price tag of around $40,000.

Those are important price points because they're below the average price of a new EV, which is currently around $57,000. Potential EV buyers often cite cost as a concern when considering an electric vehicle, and for EVs to gain ground in the market, their prices need to come down. You can't buy a new Rivian vehicle for less than $71,000 right now, so the upcoming lower-priced models could potentially spark interest among more budget-conscious buyers.

What's more, Rivian has proved that it can run an efficient EV business after reporting two consecutive quarters of positive gross profit. Management set a goal to achieve that, and it did so, in part, by retooling and reengineering its manufacturing process last year -- cutting up to 35% in material costs for some vehicles. Achieving that goal also unlocked $1 billion in additional funding from its partner, Volkswagen, which was another win for Rivian.

Unfortunately, even after notching these wins, Rivian is still in uncharted territory.

The road to success is long, winding, and uncertain

Despite Rivian's successes and its pipeline of new models, the company is facing an arduous path. First, the federal government ending the EV tax credits is a blow to the industry. Rivian's vehicles didn't qualify for the credit because they're too expensive, but the company was able to take advantage of a leasing loophole that helped lower costs for some customers.

Making matters worse for Rivian is that after two consecutive quarters of positive gross profit, the company slipped back into the red in the second quarter. That may not have been such a big deal if everything else was humming along for the company, but it came just ahead of Rivian's management narrowing its full-year vehicle guidance.

Rivian now expects deliveries between 41,500 to 43,500 -- lower than its previous midpoint guidance by about 500 vehicles. That's the company's second revision this year. When Rivian started its production year, it first estimated deliveries of up to 51,000.

What's especially disappointing is that deliveries for Q3 were actually up by 32% from the year-ago quarter, but the company's revised full-year delivery guidance was adjusted down, likely due to the federal tax incentives being eliminated and tariff uncertainty. While some of the delivery increases were likely due to customers signing up for leases before the tax credits expired, there's no getting around the fact that the current 2025 estimates are nearly 18% lower than 2024's deliveries.

Is Rivian a millionaire maker?

For the reasons listed above, I don't think Rivian stock is a millionaire maker. I have a small position in Rivian, and I'm willing to wait out this rough patch to see what happens with the company, but expecting Rivian stock to mint millionaires doesn't look like a good bet.

That doesn't mean Rivian isn't a good company or won't be a good long-term investment, but investors should know that the EV industry is facing significant headwinds and Rivian will likely face more hurdles ahead as it tries to build its EV future.

Chris Neiger has positions in Rivian Automotive. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.