Investors merely glancing at Rivian (NASDAQ: RIVN) stock might avoid the company in 2025 simply because it doesn't appear to have many catalysts. The next vehicle launch won't be until early 2026 when the R2 goes into production, followed by the R3X and R3. Add uncertainty about the incoming U.S. presidential administration's attitude toward the electric vehicle (EV) industry, and you have a stock that could be stuck in neutral throughout 2025.
But closer attention to Rivian shows a couple of dark horse catalysts that could send the stock surging higher.
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Another partnership?
One of Rivian's biggest wins in 2024 came when the company announced a joint venture between itself and Volkswagen Group (OTC: VWAGY). The latter agreed to invest up to $5.8 billion over the next three years in the joint venture, which will use Rivian's software to create advanced electrical infrastructure for each automaker's future vehicles. Should the partnership work out, the two automakers are even exploring an expansion of the joint venture (although specific details have not been made public).
Other companies may want to form similar partnerships, according to Rivian management. "I'd say that many other OEMs [original equipment manufacturers] are knocking on our door," Rivian's chief software officer, Wassym Bensaid told Reuters this month.
Rivian's electrical architecture requires fewer electronic control units (ECUs) and significantly less wiring in each vehicle, which reduces vehicle weight and simplifies manufacturing -- all reasons Rivian's technology is in demand. Rivian's technology is also essential to designing cars that incorporate software for over-the-air updates. Bensaid told Reuters Rivian is open to helping other potential partners improve their electrical systems.
Make no mistake, Rivian's joint venture with Volkswagen was a huge win for Rivian that may reduce costs, provide the ability to negotiate higher volume supplier deals, and give access to valuable capital. Another partnership or joint venture could be a dark horse catalyst for Rivian in 2025.
What about Rivian's electric delivery vans?
Electric delivery vans (EDVs) were one of Rivian's early catalysts. One of the biggest headline grabbers was an agreement to deliver 100,000 EDVs to Amazon by 2030. Amazon now has over 20,000 Rivian EDVs making deliveries across the U.S. market. Rivian's deal with Amazon was exclusive for a time, but now Rivian is open to taking on customers of all kinds for its EDVs. AT&T (NYSE: T) was its first non-Amazon customer of this kind, launching a program in late 2023 that carried into 2024, but pilot programs and testing take time.
Rivian CEO RJ Scaringe told the website Teslarati that this focus on pilot programs is the nature of this business as partner companies want to start out small to see how these vehicles will do in terms of actually fitting their needs (including servicing, digital support, and infrastructure) before committing to large fleet-sized purchases.
It wasn't likely that Rivian would test with a new potential customer, set up a pilot program, and ink a long-term order deal before 2025. So 2025 may be the year new customers start placing orders for EDVs, and even one big win could be the catalyst Rivian needs in an otherwise quiet year.
What it all means for potential Rivian investors
Unfortunately, with no vehicle launches set for 2025, Rivian's stock might trade in line with the broader EV industry, which is currently facing uncertainty with the incoming U.S. presidential administration publicly pulling back on the prior administration's support for the EV industry. However, if Rivian ends up bringing on a new partner or forming a joint venture similar to the one it has with Volkswagen, or if Rivian sets up a new customer with a big EDV order, it could get this investment vehicle back into drive mode for 2025.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.
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