Uber Wants 50,000 Rivians. Here's Why Robotaxis, Not EVs, Might Be Rivian's Biggest Opportunity.

Rivian Automotive (NASDAQ: RIVN) has spent years trying to become a major player in the electric vehicle market. Now a new deal with Uber (NYSE: UBER) could open the door to an entirely different opportunity: robotaxis.

Uber plans to deploy at least 10,000 autonomous Rivian R2 vehicles, with the option to purchase as many as 40,000 more beginning in 2030. That's huge! Uber is also prepared to invest up to $1.25 billion in Rivian through 2031, although most of that money is tied to Rivian hitting specific autonomous-driving milestones. For a company expected to deliver only 65,000 to 70,000 vehicles in all of 2026, this is not trivial.

More than an EV company

To be sure, Rivian still needs to prove it can profitably manufacture electric vehicles at scale. In Q2, the company delivered 12,194 vehicles and generated $1.66 billion in revenue. It posted a $179 million gross profit, but its automotive business still recorded a $36 million gross loss. Rivian also burned through $849 million in free cash flow during the quarter. But robotaxis could give Rivian another way to make money from the technology it's already developing.

Rivian's newest autonomy platform goal is eventually to reach level 4 autonomy. At this level, a vehicle can drive itself without a human, but only within defined operating conditions.

Rivian is also selling Autonomy+, its advanced driver-assistance software, for $49.99 per month or $2,500 upfront. That starts to move Rivian beyond the economics of simply building a vehicle and collecting a one-time sale.

The Uber deal changes the equation

Uber brings something Rivian doesn't have: enormous ride-hailing scale. Uber completed 3.9 billion trips in the second quarter alone, up 18% from a year earlier. If Rivian can successfully develop level 4 autonomy, Uber gives it a ready-made network that can put thousands of autonomous vehicles to work.

Image source: Getty Images.

Of course, there are still risks. Rivian hasn't yet demonstrated level 4 autonomy commercially, the first deployments aren't expected until 2028, and the additional 40,000 vehicles aren't guaranteed purchases. Still, the deal shows what Rivian could become.

The R2 may help Rivian reach a much larger consumer market. But if the same vehicle platform can also become the foundation for tens of thousands of autonomous taxis, Rivian won't just be selling EVs. It could also be selling the hardware and software that drive them. And that completely changes the game.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.