With Rivian Stock Surging, Is It a Buy Before 2025 Ends?

With 2025 nearing its end, investors in Rivian Automotive (NASDAQ: RIVN) received an early gift as the stock logged its strongest monthly performance of the year, jumping 24.2% in November, according to data provided by S&P Global Market Intelligence. The stock has extended its rally into December, rising another 5% in the month and 32% in 2025, as of this writing.

Rivian narrowed its 2025 delivery guidance to 41,500 to 43,500 vehicles from 40,000 to 46,000 units last month, but investors aren't worried. They're paying greater attention to Rivian's crucial partnership with Volkswagen and its new electric vehicle (EV) that'll compete head-on with Tesla's Model Y.

Image source: Rivian.

Rivian is leveling up its EV game

Shares of Rivian surged after the EV maker reported its third-quarter results in early November. Rivian's revenue surged 78% year over year to $1.5 billion. While automotive revenue rose 47%, software and services revenue jumped 324% to $416 million as Rivian wasn't providing these services in 2024.

More than half of its software and services revenue came from its joint venture with Volkswagen. Rivian and Volkswagen formed a $5.8 billion joint venture in late 2024 to utilize Rivian's electrical architecture and software stack, with a focus on the launch of Rivian's R2 in 2026 and the anticipated launch of the first Volkswagen models in 2027.

Most importantly, Rivian reported a gross profit of $24 million in Q3, compared to a gross loss of $392 million in Q3 2024, thanks to higher average selling prices and lower production costs. Rivian's automotive cost of revenue dropped significantly by nearly $19,000 per vehicle delivered.

Those numbers sent Rivian shares soaring, as the company's relationship with Volkswagen is emerging as a major growth catalyst, pushing Rivian toward profitability and fast-tracking the launch of its mid-size electric SUV, R2. Rivian is also working on more affordable EVs, including all-electric crossovers R3 and R3X.

Why Rivian stock could go even higher

R2 should be a game changer for Rivian as it will mark its entry into the most lucrative car market in the U.S. – vehicles with a price point of around $50,000. Rivian expects to begin production and deliveries of R2 in the first half of 2026 from its Illinois factory, which will have an annual capacity of 155,000 vehicles. Rivian will also begin construction of a new plant in Georgia next year, with an annual capacity of 400,000 units.

R2 is Rivian's most affordable electric vehicle and will compete with Tesla's popular Model Y. With R2 nearing production and the company exiting Q3 with $7.1 billion in cash, investors are betting big on 2026 prospects and bidding the shares higher.

Neha Chamaria 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.