Rivian Surging Despite CR Reliability Bashing

Despite scoring last in a survey of 22 automotive brands by Consumer Reports for reliability this month, Rivian shares are climbing amid bullish forecasts that its deals with Amazon and Volkswagen make the EV maker less vulnerable to rollbacks in U.S. government consumer subsidies to buy EVs.

Donald Trump has not yet reoccupied the White House, but his intentions to roll back the $7,500 federal tax credit for EV purchases is forecasted to hurt EV sales for most automakers trying to get sales traction for the battery-electric vehicles on the market now and coming in 2025. Rivian, though, is positioned to suffer the least, according to Wall Street reports.

Rivian’s shares are up 12% in December based on Wednesday's close after earning an upgrade with a “massive market opportunity” ahead of it, says Benchmark Securities. According to the investment bank, Rivian has the potential to capture a significant share of EV sales over the next few years.

Despite the incoming Trump Admin.’s stated hostility toward federal subsidies for EVs, sales will continue as many upmarket consumers will continue to buy EVs. Automakers are far from abandoning battery-electrics as Trump is viewed an outlier in opposing incentives for consumers to switch from ICE vehicles to EVs.

In Rivian’s case, it will see increased revenue from supplying Amazon with EVs, as well as its deal to supply VW with software technology for the German automaker’s ambitious EV sales goals in Europe, Latin America and the U.S. Rivian's software and other technology will be used at Volkswagen Group's Scout unit for the start-up's pickup and SUV.

In a note to investors, Benchmark points out that “of the EV newcomers, Rivian appears particularly well positioned with contracts from Amazon and Volkswagen.”

Amazon, which holds a stake in Rivian, has committed to purchasing 100,000 custom electric delivery vehicles (EDVs) from the start-up by 2030. As of November, over 20,000 of these vehicles were operational across the U.S.,

The analyst firm initiated coverage on Rivian stock with a Buy rating and $18 share-price target, suggesting a potential 28% upside from its previous $14 closing price.

Rivian had $6.7 billion in cash and equivalents at the end of the third quarter, including a $1 billion convertible note from Volkswagen.

Rivian in 2026 is expected to launch a smaller, cheaper vehicle, the R2, starting at $45,000.

The company expects to build between 47,000 and 49,000 vehicles this year at its Normal Illinois plant. The company has a $6.5 billion federal loan pending, which the company says would be applied to a planned plant in Georgia with capacity of 400,000 vehicles.