Rivian results boost shares out of EV startup gloom

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Shares of Rivian Automotive Inc rose nearly 6% on Wednesday as the company's positive earnings stood out in a poor quarter for electric-vehicle startups, but analysts warned that stiff competition will be a hurdle in its path to profitability.

"There is an increasingly narrow window of opportunity to muscle its way off the side-lines and onto the main track but ... the path is full of great big potholes that already have seem to have impeded some of its startup peers such as Lucid," said Danni Hewson, AJ Bell's head of financial analysis.

Amazon-backed Rivian made 9,395 vehicles between January and March, which equates to about 2% of the 440,808 produced by Tesla in the same period.D.A. Davidson analyst Michael Shlisky, who was among the 10 analysts that lowered their price target on the stock, said Rivian has seen some success in reducing costs by switching to self-made Enduro motors and cheaper lithium iron phosphate batteries.

The company is also expected to benefit from a pullback in commodity prices and easing supply chain issues. "As sagging EV commodity prices, technology improvements, and supply chain loosening positively impact operations, we see a logical path to positive gross margins next year," Canaccord Genuity analysts said.Reporting by Akash Sriram in Bengaluru; Editing by Saumyadeb ChakrabartyAkash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections.

 

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