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Investing.com -- Rivian Automotive Inc (NASDAQ:RIVN) shares surged more than 13% after Benchmark initiated coverage with a “buy” rating, citing the electric vehicle maker’s strong industry partnerships, robust financial position as key drivers for future growth.
The brokerage set a price target of $18, and said Rivian was well-positioned to capture significant market share in the expanding EV sector over the next decade.
Benchmark highlighted Rivian’s partnership with Amazon.com Inc (NASDAQ:AMZN). and Volkswagen AG (OTC:VWAGY).
The company has delivered roughly 15,000 of the 100,000 electric delivery vans ordered by Amazon, which owns a 15.8% stake in Rivian. Meanwhile, its joint venture with Volkswagen (ETR:VOWG_p), announced in June, includes a $1 billion upfront investment and an additional $4 billion expected through 2026.
Rivian is also supported by a $6 billion conditional loan commitment from the U.S. Department of Energy to fund its $5 billion manufacturing facility in Georgia.
The company has been cutting costs with its second-generation R1 vehicles, launched earlier this year, and plans to scale further with its R2 mid-size platform, slated for release in 2026. Benchmark anticipates Rivian achieving positive gross profit by the fourth quarter of 2024.
With more than $6 billion in liquidity and $1.3 billion available under an asset-backed lending facility, Rivian is well-funded to navigate near-term challenges, Benchmark said.
“We believe Rivian’s capability to manufacture EV’s domestically with in-house designed software has been validated through its partnerships with Amazon and Volkswagen”
