Is Rivian Stock a Buy at $15?

Rivian Automotive (NASDAQ: RIVN) stock has sharply underperformed in 2026, declining by around 28% since the start of the year. And this can be explained by its huge losses and uncertainty about the EV industry as a whole after the Trump administration pulled government support.

That said, with a price tag of just $15, Rivian is now a far cry from its peak of $172 reached in late 2021. And this is sure to attract the attention of deal-hungry investors. Let's dig deeper to decide if the dip is a buying opportunity or a sign to stay far away from the struggling automaker.

The macroeconomic situation remains complex

The U.S. EV market is down but not out. Last year, the U.S. government pulled back incentives such as a $7,500 tax credit for new purchases, and eased tailpipe emission standards for internal combustion engine (ICE) vehicles. Combined, these changes hurt the near-term demand for EVs while also putting long-term pressure on adoption by potentially making gasoline-powered cars more competitive.

The new policy stance coincides with a period of relatively high interest rates (compared to the pre-pandemic period), which makes it harder for consumers to afford the monthly payments on new cars.

However, the macroeconomic situation isn't all bad. The war in Iran has spiked oil futures to $94 at the time of writing -- and this is having a real impact on the prices many Americans pay at the pump. High gas prices will encourage consumers to consider making a permanent switch to EVs to protect their pocketbooks from oil price volatility.

Management pushes for a turnaround

Rivian's first-quarter earnings weren't very exciting. Revenue grew by 11.4% to $1.38 billion amid a modest decline in automotive sales, which was counterbalanced by a jump in software and services revenue as the company's recent partnership with Volkswagen continued to scale up. That said, while software will help Rivian boost growth and diversification, it probably won't be a substitute for actually manufacturing cars.

Rivian will need to scale up its automotive business to at least breakeven if it wants to stay in business. That's because the company's current cash burn looks unsustainable, and things are moving in the wrong direction with operating losses jumping 35% to $881 million.

Management has several strategies to help turn this situation around. The most promising one is the release of new vehicles such as the R2, a midsize SUV with an MSRP of $58,000. The company has already started production and early deliveries of the R2, which could significantly boost volumes by exposing Rivian to the much larger mass market of consumers that couldn't afford its full-sized R1 SUV, which starts at $76,990.

Image source: Getty Images.

Economies of scale are usually one of the best ways for a small company to become profitable because they spread fixed costs over a larger number of units, helping reduce the per-unit production cost. Management is also leaning into this by substantially reducing the R2's materials cost through strategies such as underbody gigacasting, and changes to the vehicle's suspension and harness systems.

The R2 program will also benefit from a recent partnership with Uber Technologies, which plans to use the vehicle as a platform for its robotaxi ambitions, alongside other manufacturers. The deal involves an expected investment of $1.25 billion, along with a purchase agreement for up to 50,000 units of the new vehicle. While these purchases will likely be spread out over many years, they could help boost production volume and provide economies-of-scale advantages.

Is Rivian a buy yet?

Rivian definitely seems to have all the ingredients for a potential turnaround. But investors have been burned many times in the past. Cash burn remains alarmingly high, and the new R2 platform has yet to have a meaningful impact on operational results. It makes sense to take a wait-and-see approach before considering a position in the stock.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.