Why Rivian's R2 Could Be Worth Far More Than Its Sales Numbers Suggest

Rivian Automotive (NASDAQ: RIVN) isn't scheduled to report third-quarter earnings until Oct. 29, but the electric vehicle (EV) maker's production and delivery numbers point to a strong quarter. The company said its Normal, Illinois, plant produced 19,751 vehicles, up 84.2% year over year, and delivered 19,248 cars in the third quarter, 45.8% more than in the same period a year ago.

The driving force for that growth is the company's launch of the R2, a midsize EV that competes with the Model Y from Tesla, the Ioniq 5 from Hyundai Motor, the EV6 from Kia Motors, and the Mustang Mach-E from Ford Motor Company.

The R2 is smaller than Rivian's R1 models and has a significantly lower price tag of $45,000 for the single-motor standard model. That price is still higher than the base models of its main competitors, but the R2 has a design edge with more ground clearance at 9.6 inches, fold-flat front seating, and standard off-road utility.

Here are three reasons to consider Rivian stock now, despite its more than 32% decline so far this year.

Image source: Getty Images.

The R2 broadens the company's appeal

Rivian's flagship R1T pickup and R1S SUV established its reputation as a premium brand, but those cars' $75,000-plus price tags naturally limited total addressable market (TAM) volume. The R2 brings the company into the higher-volume mid-size crossover market.

It also introduces the brand to more drivers who may choose higher-priced models down the line. Analysts project R2 deliveries will add more than 20,000 units in its initial rollout phase before ramping up significantly. This volume shift gives Rivian a clear runway to increase overall unit deliveries and claim broader EV market share.

Growth in revenue, production

In the second quarter, Rivian reported $1.66 billion in revenue, up 27% year over year, with gross profit of $179 million, up from a loss of $206 million in the same period a year ago. The stronger production numbers are also leading to improved margins, with Rivian reporting 11% gross margin in the quarter, an improvement of 2,700 basis points year over year.

In its preliminary third-quarter report, the company reiterated that it expects to deliver 65,000 to 70,000 vehicles in 2026, up from 42,247 delivered in 2025.

Rivian's decision to make a crossover SUV and to ramp up sales appears to be well timed. While EV sales suffered after government rebates were curtailed in the U.S., the soaring price of gas is making EVs appear like a smarter long-term choice for some consumers.

Its software provides a dependable revenue stream

While traditional automakers rely almost entirely on one-off vehicle sales, where gross margins can be volatile, Rivian is building a high-margin technology ecosystem that functions more like a software company.

Through its joint venture with Volkswagen, Rivian licenses its proprietary electrical architecture, zonal hardware controllers, and software stack. In 2025 and 2026, software and services revenue surged to account for nearly 30% of Rivian's total top-line revenue, generating a gross margin above 35%. Licensing its technology platform to established global automakers creates a reliable, high-margin revenue stream that offsets automotive manufacturing losses.

As Rivian's on-road fleet expands with the R2 and R1 lines, the company is expanding its direct-to-consumer software offerings. Features like Connect+ (in-vehicle connectivity and satellite streaming) and Autonomy+ (advanced hands-free driving capabilities) generate predictable, recurring subscription revenue per active driver over the vehicle's lifespan.

James Halley has positions in Ford Motor Company. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.