Barclays Reiterates Rivian’s ‘Hold’ Rating and $14 PT

“The most focus has been on R2’s path to positive gross margin, especially as R1 has struggled with profitability and investors have questioned whether RIVN can achieve significantly higher margin % on a cheaper car.

That said, we also believe there is increasing uncertainty on R2’s volume outlook following the recent negative policy developments.

We see R2 as a more premium vehicle (ASP $60k+ for the next several years until the Georgia factory scales), well above comps such as CR-V/RAV4 (~$30-40k) and Model Y (~$45-50k) and more in-line with luxury brands.

This would likely be the “sub-optimal” scenario for RIVN, as luxury 2-row SUV TAM is roughly just ~3x the luxury 3-row SUV TAM that R1S competes in, implying limited opportunity for significant volume growth in R2.”

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