Why Do Some Tesla Investors Despise Rivian?
Rivian's stock surged after Volkswagen announced a $5 billion investment in the company.
This move has sparked discussions among investors, including Tesla bull Gary Black and Ross Gerber, about VW's strategic decision.
This move has sparked discussions among investors, including Tesla bull Gary Black and Ross Gerber, about VW's strategic decision.
Gary Black's Perspective:
- Gary Black, Managing Partner at Future Fund, expressed on X that some Tesla investors don't understand the rationale behind VW's investment in Rivian.
- He believes the investment could significantly expand Rivian’s market and provide VW with a strong equity stake in a major EV brand.
- Black acknowledges Rivian’s software is seen as inferior to Tesla’s but predicts Rivian's stock could rise to $22 per share.
- He noted Amazon is Rivian's largest shareholder with a 16% stake.
- Black pointed out that Tesla trades at a higher EV/revenue multiple compared to Rivian.
- He believes the investment could significantly expand Rivian’s market and provide VW with a strong equity stake in a major EV brand.
- Black acknowledges Rivian’s software is seen as inferior to Tesla’s but predicts Rivian's stock could rise to $22 per share.
- He noted Amazon is Rivian's largest shareholder with a 16% stake.
- Black pointed out that Tesla trades at a higher EV/revenue multiple compared to Rivian.
Black questioned why some Tesla investors dislike Rivian, as both companies aim to accelerate the transition to sustainable energy.
He highlighted Volkswagen as an ideal partner for Rivian due to VW’s experience managing various auto brands.
He emphasized Rivian’s financial stability with a cash runway of two years as of March.
He highlighted Volkswagen as an ideal partner for Rivian due to VW’s experience managing various auto brands.
He emphasized Rivian’s financial stability with a cash runway of two years as of March.
Ross Gerber's Take:
- Ross Gerber, CEO of Gerber Kawasaki Wealth and a Tesla investor, called VW's investment “great news for Rivian.”
- He believes VW’s support could help Rivian sustain operations and provide necessary operational support.
- He believes VW’s support could help Rivian sustain operations and provide necessary operational support.
VW's investment is seen as crucial for Rivian, especially given recent challenges such as a recall of nearly 700 vehicles.
Guggenheim has given Rivian a Buy rating with an $18 price target, citing its appeal to younger, digitally oriented consumers.
The joint venture will focus on developing next-gen battery-powered vehicles, with VW investing $1 billion immediately and an additional $4 billion over time.![]()
Guggenheim has given Rivian a Buy rating with an $18 price target, citing its appeal to younger, digitally oriented consumers.
The joint venture will focus on developing next-gen battery-powered vehicles, with VW investing $1 billion immediately and an additional $4 billion over time.
VW's investment underscores the potential and strategic value of Rivian in the EV market.
Despite operational challenges, the financial backing from VW positions Rivian for future growth and stability.
Despite operational challenges, the financial backing from VW positions Rivian for future growth and stability.
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