RIVN Stock Alert: Why Is Rivian Up Today?

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Rivian (NASDAQ:RIVN) stock is up more than 5% today, likely in sympathy with XPeng (NYSE:XPEV). This morning, the Chinese electric vehicle (EV) company announced that it had entered into a long-term strategic partnership with Volkswagen (OTCMKTS:VWAGY).

As part of the partnership, Volkswagen will purchase a 4.99% stake in newly issued XPEV stock. The shares, priced at $15 per share, will have a total value of approximately $700 million. In addition, the two companies will also jointly develop two B-class battery electric vehicles (BEVs) under the Volkswagen brand for sale in China. These two vehicles are expected to enter production in 2026.

Rivian isn’t the only EV company rising alongside this major investment. Nio (NYSE:NIO), Lucid (NASDAQ:LCID) and Li Auto (NASDAQ:LI) are all in the green as well right now.

Why Is RIVN Stock Up Today?

Earlier this week, Rivian unveiled its plan to sell “carbon-neutral” add-ons. To do this, Rivian will first acquire renewable energy credits from the BrightNight Starfire Renewable Energy Center. During Phase 1 of the construction of the energy center, which will begin in 2025, Rivian will purchase 100MW of renewable energy under a power purchase agreement (PPA) with BrightNight. After that, the automaker plans on bundling the add-ons with each vehicle sale.

“Eventually this will be bundled with every Rivian sale,” said CEO R.J. Scaringe. “To start, this will be a package that’s going to be available with the vehicle.” Rivian ultimately has a goal of becoming net-zero carbon by 2040.

Meanwhile, Rivian’s second-quarter earnings report on Aug. 8 after the market close is quickly approaching. During Q2, the company produced 13,992 vehicles and delivered 12,640 of them. Rivian previously gave 2023 guidance of 50,000 vehicles. The company believes that it is on track to reach that goal.

For the quarter, analysts expect an adjusted EPS loss of $1.39 on top of revenue of $993 million. The revenue figure implies year-over-year (YOY) growth of 172.83% and quarter-over-quarter (QOQ) growth of 50.24%. Rivian is still a far throw away from profitability, as analysts have forecast negative adjusted EPS until 2028 and negative GAAP EPS until 2030.

Equally important as current quarterly earnings is guidance. Analysts expect a Q3 adjusted EPS loss of $1.30 and revenue of $1.244 billion next period, signaling YOY growth of 132%. For the full year of 2023, analysts forecast an adjusted EPS loss of $5.27 and revenue of $4.119 billion.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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