Stock Market Today, May 1: Rivian Falls After Investors Focus on Cash Burn Despite Beating Q1 Expectations
Rivian Automotive (NASDAQ:RIVN), which develops and sells electric pickup trucks and SUVs, closed Friday at $15.02, down 8.41%. The stock moved lower as investors reacted to Q1 results. The company updated R2 production and funding plans, but concerns continue about cash burn and EV demand. Investors will closely watch execution of the R2 ramp and Rivian’s autonomous driving initiatives.
Trading volume reached 51.8 million shares, coming in about 78% above its three-month average of 29 million shares. Rivian Automotive IPO'd in 2021 and has fallen 85% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) added 0.28% to finish Friday at 7,229, while the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 0.89% to close at 25,114. Within electric vehicle manufacturing, industry peers Tesla (NASDAQ:TSLA) closed at $390.71 (+2.38%) and Lucid Group (NASDAQ:LCID) finished at $6.54 (+2.67%), contrasting Rivian’s slide.
What this means for investors
Rivian reported first-quarter revenue ahead of expectations and 20% higher delivery volumes year over year. Yet investors remain nervous over cash burn and the timeframe for achieving profitability.
Progress is being made, however, as the company began production of its R2 SUV for customers. Management also altered plans to increase initial production capacity 50% to 300,000 units annually at its Georgia facility under construction for R2 production.
Management confirmed that the R2 platform's bill of materials is approximately half that of the R1, promising significant cost savings. In the conference call, CEO R.J. Scaringe touted the R2 as “a game changer” with Rivian’s Gen 3 autonomy hardware available later this year.
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Howard Smith has positions in Lucid Group, Rivian Automotive, and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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