February 8, 2023

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Rivian Pops on Mercedes-Benz EV Van Deal;  Burning cash is still a concern: Analyst |  daily business investor

Rivian Pops on Mercedes-Benz EV Van Deal; Burning cash is still a concern: Analyst | daily business investor

Starting an electric car Rivian Cars (countrysideGerman carmaker Mercedes-Benz has signed a memorandum of understanding to create large electric trucks for each of its brands, according to a joint statement Thursday. RIVN stock jumped on the news.


The two companies intend to open a new plant in Central and Eastern Europe, where Mercedes-Benz has a site. The statement said the joint venture would start production “in a few years”.

“This is a major step towards European strategy with a major partner like Mercedes,” Wedbush analyst Dan Ives told IBD. “Rivian has a unique opportunity to pursue the European trade opportunity into 2023 and beyond.”

Mercedes already makes commercial trucks. The plan is for the two companies to produce two large, all-electric trucks: one based on the electric platform only for Mercedes-Benz Vans and the other based on the second-generation Rivian Light Van (RLV) electric vehicle.

Rivian manufactures commercial trucks for Amazon (AMZN). The online retail giant rolled out the first electric trucks made by Rivian on July 21. Amazon, which owns an 18% stake in Rivian, has ordered 100,000 of its electric trucks.

Meanwhile, CFRA Research analyst Garrett Nelson is cautiously optimistic about the long-term impact of the deal on Rivian’s business.

“The MoU between Rivian and Mercedes is a positive thing, although it does little to alter the company’s near-term prospects and burn rates, which is a greater concern for investors, especially with a few electric start-ups having declared bankruptcy. recently or warning about liquidity issues.”

Rivian’s sales in the second quarter were approximately $364 million. But it posted an adjusted net loss of $1.62 per share. It had about $15.46 billion in cash and cash equivalents, about $1.5 billion less than the end of the first quarter.

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Rivian Stock

Rivian shares rose nearly 11% to 36.88 days stock market today. However, RIVN’s stock is far from viable, as it trades well below its IPO price of $78.

Rivian stock is trading above the pullback level 50 days streakto me MarketSmith. But it is well below the relatively new 200-day moving average.

weak arrow RS . rating Out of 19 out of 99.

Rivian إنتاج production

Rivian produced 4,401 vehicles in the second quarter, an increase of 72% from the previous quarter. 4,467 vehicles delivered, an increase of 264% from the first quarter.

The company reiterated that it is on track to meet its production target of 25,000 EVs for 2022, but that’s half its original estimate of 50,000.

Rivian says she does not expect to be profitable for the foreseeable future. The intensification of production has been sporadic, with the typical growing pains of start-up. Industry-wide supply chain problems have particularly affected Rivian because it has not yet established strong relationships with suppliers.

“With supply headwinds continuing to challenge the Rivian’s ability to dampen vehicles, the production story will be under bright lights for the coming quarters,” Ives said in a recent customer report.

However, Ives maintains Outperform’s rating with raising RIVN’s share price target from $40 to $45, “which further reflects confidence in the production story.”

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