Key Points
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Rivian stock has outperformed its much larger competitor, Tesla, in the past year.
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The company is about to launch the R2, a mass market SUV at a more affordable price.
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The electric vehicle maker’s gross profits increased by $1.3 billion in 2025.
The past few years have been difficult for Rivian Automotive (NASDAQ: RIVN) investors. The American electric vehicle company’s stock is down 10% year to date, and down 86% since its initial public offering in November 2021.
Investors have been disappointed by Rivian stock for several reasons. The EV business is highly capital intensive, electric car sales growth in the U.S. market has been sluggish, and the U.S. federal government has recently ended some tax credits and incentives that were favorable to EV companies.
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And Rivian is a small player in the auto industry, with a market capitalization of $21.7 billion, and delivering only 42,247 vehicles in 2025. That’s tiny compared to Tesla, which has a market cap of $1.6 trillion, and delivered 1.6 million vehicles in 2025. But in the past year, Rivian shares have outperformed Tesla and other electric car stocks like Li Auto (NASDAQ: LI) and Nio (NYSE: NIO).
And its most recent earnings report on Feb. 12 gave investors a big shot of optimism. Rivian shares rose by more than 25% the day after the announcement. Let’s look at why Rivian investors are suddenly so bullish — and why this EV company stock could be a buy in 2026.
$1.3 billion improvement in annual gross profit
Rivian is not yet profitable, but its gross profit (revenue minus cost of goods sold) is heading in the right direction. The company reported consolidated gross profit of $144 million for the full year 2025, up from negative $1.2 billion in 2024.
This $1.3 billion turnaround was driven by a $775 million improvement in gross profit for its automotive sales, with higher average selling prices and lower cost per vehicle. The company says its annual average sales price per vehicle increased by about $5,500, and cost of goods sold per unit decreased by about $9,500 year over year. The company also delivered $576 million of gross profit from software and services in 2025, up from $7 million in 2024.
A family gets out of their Rivian R2 vehicle.
Image source: Rivian.
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Rivian is launching the R2 for the mass market
Until now, Rivian has been selling a relatively small number of vehicles at premium prices. The starting prices of its vehicles are $72,990 for the R1T truck, and $76,990 for the R1S SUV. On the most recent earnings call, CEO RJ Scaringe said that the company’s R1S SUV was “the best-selling premium electric vehicle priced above $70,000 in California, New York, New Jersey, Oregon, Virginia, and Washington, D.C.”
But in 2026, Rivian is expanding to the mass market with a more affordably priced vehicle called the R2. This new vehicle’s pricing will be announced on March 12, but it offers more than 300 miles of battery range and over 650 horsepower. Scaringe said that the R2 has been getting “extremely positive” reviews in preproduction, and that he believes it will be “a game changer for our customers, our company and the industry.”
If Rivian can continue to improve its profitability and operational efficiencies, and if the R2 is a big hit with electric vehicle buyers, there’s reason to be hopeful about this stock.
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Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.