What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) jumped 3.1% in the afternoon session after the company and Volkswagen Group announced a joint semiconductor procurement strategy to streamline their supply chain and cut costs.
The new initiative introduces a procurement model spanning more than 50 semiconductor categories, aiming to reduce costs and strengthen supply chain resilience for future vehicles. This news builds on positive commentary from the previous day's Goldman Sachs conference, where CEO RJ Scaringe highlighted ambitious plans for the company. Scaringe pointed to the upcoming, lower-priced R2 vehicle as a pivotal point for growth and expanding market reach. He also reinforced the company's focus on achieving adjusted EBITDA break-even by 2027 and the strategic importance of its broader partnership with Volkswagen.
After the initial pop the shares cooled down to $14.28, up 2.7% from previous close.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3.6% on the news that the company announced it was cutting less than 1.5% of its workforce as part of a strategic plan to streamline operations ahead of its R2 SUV launch.
The job cuts are part of the company's efforts to enhance efficiency and lower costs as it prepares for the highly anticipated launch of its more affordable R2 model in 2026. According to a company spokesperson, the changes are part of an “ongoing effort to improve operational efficiency for R2.” The positive investor reaction suggests the market views this cost-cutting measure as a prudent step toward improving the company's financial health and ensuring a successful launch of its next-generation vehicle, which is crucial for its long-term growth.
Rivian is up 7.8% since the beginning of the year, but at $14.28 per share, it is still trading 15.6% below its 52-week high of $16.92 from May 2025. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $141.78.
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