Prediction: Rivian stock will move on emerging catalysts

Rivian Automotive (RIVN -4.00%) recently released its second quarter earnings update and there were no real surprises. But we may be in the calm before the storm for Rivian, and investors should start paying attention.

That’s because the electric vehicle (EV) startup is preparing to start production next year on the R2 SUV, its first new model. The smaller and less expensive R3 will follow. If these new electric vehicles launch successfully, they should be major catalysts for Rivian’s stock. Investors who believe in the Rivian brand and see the success it’s had with its R1 models translating into a growing customer base should look at the stock before these catalysts affect its share price.

Rivian has found its niche market

Rivian has differentiated itself from the EV industry leader adze from the start. It launched only a pickup truck and a large SUV model as initial offerings for electric vehicle consumers. This plunged it into a growing market that did not compete with Tesla’s popular Model 3 and Y.

This business plan allowed it to gain share in vehicle markets not yet penetrated by other all-electric offerings. At the same time, as shown below, pickup trucks and SUVs have been some of the best-selling light vehicle models in the US in recent years. And Rivian now has plans to enter an even bigger consumer market.

Image source: Statista.

The next-generation R2 SUV will go into production next year, with deliveries scheduled to begin in early 2026. This smaller, more affordable model should add to Rivian’s addressable market. It plans to enter the top crossover segment with the R3 after that.

These additional models will no doubt be catalysts driving Rivian’s stock in the coming months. A solid order book for R2 is likely to generate bullish views on the stock. Successful releases and reviews will only support those views. But positive results are not the only possibility. Any perceived delay in demand or the vehicles themselves could cause inventory to drop. One way or another, investors should be prepared for volatility in the electric vehicle maker’s stock in the near future.

Will Rivian’s next EV be a success?

Rivian CEO RJ Scaringe is already touting the R2’s features and differentiating it from Tesla’s Model Y. He says the R3 will have even more unique features. The R2, which will start at around $45,000, will be “worlds different” than the Model Y, according to Scaringe.

He wants to highlight Rivian’s support of outdoor adventure uses for its vehicles as a key and unique reason for wanting to own an R2 SUV. Scaringe recently stated, “You can actually take it off-road, you can take it through a riverbed, you can do the things you expect from an SUV.”

For its part, the R3 is being touted as offering the driving thrill of a rally car with unusually high ground clearance for the crossover vehicle segment.

Investors must have a plan

If launched successfully, the market should react positively to Rivian’s expanded product offering. Investors who believe in the company and its brand may want to get ahead of these catalysts.

But investors must also recognize the high risk and speculation involved. One way to hedge this risk is simply to invest an appropriate amount in a growth stock like Rivian. If it is very successful, a small allocation is all that is needed. If it fails, that small investment is all you’d want.