Do Higher Oil Prices Mean Rivian Stock Will Finally Mount a Rebound?
Written by Reuben Gregg Brewer for The Motley Fool -> Rivian is attempting to build a sustainably profitable electric car company, with this year's launch of the R2 a key turning point for the business. Higher oil prices help make the company's opportunity more attractive, but
Rivian is attempting to build a sustainably profitable electric car company, with this year's launch of the R2 a key turning point for the business.
Higher oil prices help make the company's opportunity more attractive, but they don't minimize the importance of execution.
The sales of used electric vehicles took off as oil prices rose earlier in the year. That's an early sign that consumers may be looking for a way to avoid having to deal with rising gasoline costs. And it makes the story behind Rivian (NASDAQ: RIVN) more compelling. However, execution will still determine Rivian's success. Here's what you need to know before you buy the stock.
Rivian is attempting to build a sustainably profitable business selling electric vehicles, with a focus on trucks. So far, it has proven it can make award-winning vehicles, produce them at scale, and sell them for more than it costs to build them (it had a gross profit in 2025). As a business, Rivian has made huge strides.
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However, it still hasn't generated positive earnings. The goal is to ramp up production so it can spread its costs over more vehicles. Management hopes that this will allow it to become sustainably profitable. That is, basically, what allowed Tesla (NASDAQ: TSLA) to get into, and stay in, the black. High gasoline prices are a positive development because they make electric vehicles more attractive . However, high gas prices alone won't be enough to sustain a rebound in Rivian's stock.
The next big step in Rivian's story is the launch of a mass-market version of its high-end truck. The company is now rolling out the lower-cost truck, known as the R2, to the market. The big question is how well received it will be by consumers.
High gas prices help, but they probably won't be the main factor in consumer buying decisions. After all, there are plenty of other EVs that a person can buy. Curb appeal will likely be the biggest factor, though cost will clearly play a role, as well. If the R2 is desirable and the price is low enough to attract mass-market buyers, it will be a success. And that, in turn, could lead to a sustained recovery in Rivian's stock price as it inches closer to becoming a sustainably profitable business. If the R2 is too expensive or the vehicle just doesn't resonate with car buyers, Rivian will have a hard time ahead.
