The upside for Rivian (NASDAQ:RIVN) stock could be tied to its status as an automotive supplier and partner instead of as a standalone electric vehicle (EV) company, according to Morgan Stanley’s Adam Jonas. The analyst raised his price target to $17 from $13 while maintaining an “overweight” rating.
Jonas’s increased price target comes just a few weeks after Rivian announced that it had secured an up to $5 billion investment from Volkswagen (OTCMKTS:VWAGY). As part of the agreement, the two companies intend to form a joint venture based on advancing software-defined vehicle (SDV) platforms, which is expected to become active in the fourth quarter.
“Rivian has a greater chance of success as an auto/tech supplier than as a manufacturer,” said Jonas. Using this strategy, Jonas believes that Rivian’s path to profitability could be more stable as EV production is an extremely cost-intensive process.
RIVN Stock: Morgan Stanley Raises Price Target to $17 from $13
Furthermore, Jonas’s price target is based on the prediction that most of Rivian’s vehicles will continue to be built at the company’s facility in Normal, Illinois. He also believes that there is potential for future vehicles to be developed in collaboration with Volkswagen.
“We no longer contemplate the Georgia plant in any of our scenarios at this time,” said the analyst.
Earlier this year, Rivian announced that it had halted construction on its $5 billion plant in Georgia. CEO R.J. Scaringe added that the move would allow Rivian to release the R2 faster while saving $2.25 billion in costs. Rivian expects to begin R2 deliveries during the first half of 2026 with a starting price of $45,000.
Still, Rivian VP of Production Facilities Tony Sanger stated in April: “We committed to the governor, to the state of Georgia, and the citizens of Georgia that we are coming back, and we’ll be building these R-2′s and R-3′s here in Georgia.”
Across the board, Wall Street analysts have an average RIVN price target of $18.33, which is roughly in line with the current stock price. The highest target is at $36, while the lowest is at $10.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
