Rivian Stock: 3 Words That Should Scare the EV Company's Bulls

The article revealed 2 reasons why Rivian is unable to reach gross profit by next year:

1. Other EV companies are cutting price

Tesla and Ford are agressively cutting EV price will reduce Rivian's market share. Unless Rivian cut prices too, it will be difficult to increase its profit margin.

2. Ramp up production capacity without increasing productivity and reducing cost

Without reducing operation cost and increasing productivity, the company wants to triple it's revenue to achieve positive profitability is virtually impossible given the current EV market conditions.

Rivian adopted Tesla's NACS charging standard is a good move which will help the company to save cost in term building charging infrastructure. US EV Tax Incentive USD 7500 will also help Rivian to stay competitive against EVs import to US like Volvo, Polestar, Zeekr and NIO.

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Rivian's $661 million in revenue topped estimates at $652 million, and its adjusted loss per share of $1.43 was better than the consensus at $1.59, but the chart shows how distant profitability is.

Rivian is still wildly unprofitable as it just posted a gross profit loss of $535 million, or a gross margin of -81%, but the company is targeting positive gross profit in 2024. One of the factors it's counting on to get there is an increase in average selling prices.