Rivian: Underrated in AI-Driven EV Market

Published Date : 27/02/2025 

While Rivian is primarily known as an electric vehicle (EV) manufacturer, the company is quietly making significant strides in artificial intelligence (AI). Here’s why every growth investor should take a closer look at this under-the-radar AI stock. 

Artificial intelligence (AI) stocks had a breakout year in 2024.

One of the industry's largest suppliers, Nvidia, is now one of the largest publicly traded companies globally.

However, not every AI stock commands trillions of dollars in valuation.

A handful of under-the-radar AI stocks offer immense upside potential, despite the inherent risks associated with smaller companies.

One such stock that every growth investor should consider is Rivian.

Most investors are familiar with Rivian (RIVN) primarily as an electric vehicle (EV) maker, and few associate it with AI.

This is because Rivian is still predominantly an EV company.

However, the landscape of AI is rapidly evolving, and companies that aren't directly related to AI today will likely become fully integrated AI enterprises over time.

Rivian is a prime example of this transformation.

Currently, Rivian markets two luxury EV models, both priced around $100,000.

Starting next year, the company plans to expand its lineup with three new mass-market vehicles the R2, R3, and R3X.

These models are expected to debut at a more affordable price point under $50,000, making them accessible to a broader range of consumers.

This strategic move to launch mass-market vehicles is a significant growth lever for any start-up carmaker.

However, the long-term success of these vehicles will ultimately depend on Rivian's investments in AI.

The promise of self-driving cars has been a persistent theme for decades, but the pace of technological innovation has been slower than anticipated.

Equipping vehicles with the necessary radars, sensors, and software to interpret the environment and make real-time decisions is complex and expensive.

The advent of scalable AI technologies, however, could revolutionize this sector, and Rivian is already making strategic moves in this direction.

This month, Rivian released its quarterly earnings, providing insights into its AI efforts.

The company's CEO, RJ Scaringe, highlighted the shift from rules-based self-driving systems to end-to-end training methods.

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Frequently Asked Questions (FAQS):

Q: What is Rivian primarily known for?

A: Rivian is primarily known for manufacturing electric vehicles (EVs), particularly luxury models. However, it is also making significant investments in artificial intelligence (AI).

Q: What new vehicles is Rivian planning to launch?

A: Rivian plans to launch three new mass-market vehicles: the R2, R3, and R3X. These models are expected to be priced under $50,000 and are scheduled to debut in late 2026 or early 2027.

Q: Why is Rivian transitioning from Mobileye to an in-house AI solution?

A: Rivian is transitioning to an in-house AI solution to better support AI-centric models, enabling more efficient data processing and advanced perception capabilities. The previous Mobileye setup pre-processed data, making it challenging to integrate AI effectively.

Q: What financial milestone has Rivian recently achieved?

A: Rivian recently reported its first gross profit, which has helped alleviate some of the capital concerns common to EV start-ups.

Q: Why is now a good time to invest in Rivian?

A: Now is a good time to invest in Rivian because the company's upcoming mass-market vehicle launch in late 2026 or early 2027 is expected to drive sales growth. The current valuation gap between today and future sales growth provides a unique opportunity for investors. 

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