California-based electric vehicle (EV) startup Rivian Automotive (RIVN Quick QuoteRIVN - Free Report) generated positive gross profit for the second straight quarter in the first quarter of 2025. With that, it hit the gross profit milestone outlined in its agreement with German auto giant Volkswagen (VWAGY Quick QuoteVWAGY - Free Report) and expects to receive another $1 billion in funding by the end of this month. 

Rivian’s deal with Volkswagen is a major catalyst for the EV maker. Volkswagen will invest up to $5.8 billion in Rivian and their joint venture (JV) by 2027. So far, it has invested $1 billion through a convertible note and an additional $1.3 billion upon finalization of the JV in the fourth quarter of 2024. The remaining $3.5 billion will be provided over the next few years, of which $1 billion will be secured by June end. The partnership focuses on developing Rivian’s next-generation electrical architecture and software, starting with the R2 model. The JV will leverage Rivian’s existing technology to support the launch of the R2 in the first half of 2026.

With additional funding on the way, is it a good time to buy RIVN stock now? The stock is under $15 now and is up just around 5% so far in 2025. Could this be a good entry point? Let’s find out.

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U.S. EV Market Cooling but RIVN’s Long-Term Narrative Intact

The excitement around EVs in the United States appears to be cooling. A new American Automobile Association survey shows that only 16% of Americans are likely to buy an EV as their next car, which is the lowest level since 2019. High costs remain a major barrier. Most respondents cited battery repair expenses and steep purchase prices as key concerns. In March, the average EV cost was over $59,000, compared to about $47,000 for all vehicles.

This declining sentiment comes alongside political headwinds. A House budget bill passed in May aims to roll back clean energy incentives, including the $7,500 EV tax credit. If passed by the Senate, this could further stall adoption.

U.S. EV giant Tesla (TSLA Quick QuoteTSLA - Free Report) is already feeling the pressure. Tesla’s sales are falling and Chinese EV brands are gaining ground globally. Rivian, which targets the premium U.S. market, is not immune either. The company targets to deliver 40,000-46,000 vehicles in 2025, below last year’s total of 51,579.

Still, Rivian is adapting. Rivian is following a path similar to Tesla’s, aiming to expand its market with the lower-cost R2, expected to start around $45,000— well below the luxury R1 lineup. While demand for Rivian vehicles may be a concern in the near term, the long-term story for Rivian remains intact, especially if affordability improves and infrastructure expands.

How Rivian is Building for Long-Term Success

Rivian’s long-term story looks promising. The company is gearing up to expand its customer base with the upcoming R2 and R3 models, aimed at more budget-conscious buyers. Rivian sees the R2 as a key growth driver, thanks to its lower material and production costs, which are expected to be nearly 50% less than the current R1 vehicles.

Rivian is expanding its Illinois facility and building a dedicated 1.2 million square foot Supplier Park nearby, which will help reduce production costs further. The company is also preparing to break ground on its Georgia plant in 2026, expected to add 400,000 units of annual capacity for R2 and R3 models.

Rivian’s strategic focus on technology is also paying off. Rivian has rolled out hands-free, eyes-on highway driving in its latest vehicles, marking the beginning of its autonomy push. It aims to move toward full hands-free, eyes-off driving and urban autonomy, enhancing its product appeal.

On the financial front, Rivian has been steadily improving. Material cost reductions, supply chain efficiencies, and falling commodity prices are helping narrow losses. EBITDA losses fell 29% in 2024, and the company forecasts a further drop to $1.7–$1.9 billion this year. Rivian’s liquidity is strong, with $7.2 billion in cash as of March 2025. It also expects up to $3.5 billion from its joint venture with Volkswagen, $6.6 billion in DOE loans for its Georgia facility, and $1.3 billion in additional credit access. RIVN’s current ratio is better than that of the broader industry.

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While tariffs could put pressure on material costs, Rivian expects sufficient battery cell supply through early 2026 to offset much of the pressure, with U.S.-based cell production from LG starting by 2027.

All in all, Rivian’s push to lower costs, scale production, advance technology, and launch more accessible models like the R2 puts the company on a path toward long-term growth.

What Do Estimates Say for RIVN?

The Zacks Consensus Estimate for Rivian’s 2025 and 2026 bottom line implies a year-over-year improvement of 38% and 21%, respectively. The estimates for losses have also narrowed over the past 60 days.

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Conclusion

Rivian may still be navigating a challenging EV market, but things seem to be falling into place for a potential turnaround. With strong backing from Volkswagen, solid cash reserves, and a clear plan to cut costs and scale production, Rivian is putting itself in a much better position for the future. The upcoming R2 looks like a real game-changer, and the company’s focus on software, autonomy, and local manufacturing adds to the long-term upside. With positive gross profit trends and narrowing EBITDA losses, Rivian is proving it’s more than just a speculative bet. At under $15, Rivian stock could be a smart buy for investors willing to wait for the story to play out.

RIVN stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.