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Does Today’s News Make Rivian Stock a Buy?

Last December, when Rivian Automotive (NASDAQ: RIVN) had barely begun to produce its initial vehicles, the company announced plans for a second manufacturing plant in Georgia. 
Investors may have felt like the company was getting ahead of itself to be building a new facility capable of producing 400,000 vehicles per year, when it barely made 1,000 in 2021. It still may seem that way, with only 25,000 EVs expected to come from its existing Illinois facility in 2022. But the company is making long-term plans, and has gained the support of the state of Georgia for $1.5 billion in potential incentives for a new manufacturing plant there.
Image source: Rivian.

Investors today seemed to like that progress for Rivian’s future growth plan. The electric vehicle maker hopes to start production at the new plant in 2024. Combined with an expansion at its existing facility in Normal, Illinois, the company will have annual capacity to produce about 600,000 EVs when the Georgia project is fully operating. 
And if early reservations are any indication, the company could have the demand to support that volume. It already has more than 83,000 preorders for its R1 platform pickup truck and SUV models. Rivian has an additional order for up to 100,000 electric delivery vans from Amazon. 
Amazon is a major shareholder in the company, holding 160 million shares, or about an 18% stake in the company. That’s a large incentive for a big potential customer to want Rivian to succeed. But much success is already priced in. Even after Rivian shares have dropped about 70% so far in 2022, its market cap is still $29 billion. 
Investors in Rivian should be looking at the longer-term picture, however — today’s news about the Georgia plant project is a welcome development for shareholders.
Those thinking about an investment in Rivian should look at two upcoming dates. The lockup expiration from the company’s initial public offering (IPO) expires on May 9. Early investors like Amazon and Ford Motor Company may not unload shares, but there is potential for added volatility around that date. Rivian then reports its first-quarter update to investors on May 11. Both dates could bring sharp moves in the stock.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. –

Last December, when Rivian Automotive (NASDAQ: RIVN) had barely begun to produce its initial vehicles, the company announced plans for a second manufacturing plant in Georgia. 

Investors may have felt like the company was getting ahead of itself to be building a new facility capable of producing 400,000 vehicles per year, when it barely made 1,000 in 2021. It still may seem that way, with only 25,000 EVs expected to come from its existing Illinois facility in 2022. But the company is making long-term plans, and has gained the support of the state of Georgia for $1.5 billion in potential incentives for a new manufacturing plant there.

Image source: Rivian.

Investors today seemed to like that progress for Rivian’s future growth plan. The electric vehicle maker hopes to start production at the new plant in 2024. Combined with an expansion at its existing facility in Normal, Illinois, the company will have annual capacity to produce about 600,000 EVs when the Georgia project is fully operating. 

And if early reservations are any indication, the company could have the demand to support that volume. It already has more than 83,000 preorders for its R1 platform pickup truck and SUV models. Rivian has an additional order for up to 100,000 electric delivery vans from Amazon

Amazon is a major shareholder in the company, holding 160 million shares, or about an 18% stake in the company. That’s a large incentive for a big potential customer to want Rivian to succeed. But much success is already priced in. Even after Rivian shares have dropped about 70% so far in 2022, its market cap is still $29 billion. 

Investors in Rivian should be looking at the longer-term picture, however — today’s news about the Georgia plant project is a welcome development for shareholders.

Those thinking about an investment in Rivian should look at two upcoming dates. The lockup expiration from the company’s initial public offering (IPO) expires on May 9. Early investors like Amazon and Ford Motor Company may not unload shares, but there is potential for added volatility around that date. Rivian then reports its first-quarter update to investors on May 11. Both dates could bring sharp moves in the stock.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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