It has been five years since the Rivian Automotive celebrated its initial public offering (IPO). At that time, the CEO and founder, RJ Scaringe, rang the NASDAQ opening bell at the company's factory in Normal, Illinois, while the company's streamlined vehicles were parked outside the New York Stock Exchange on Times Square.

That was a period of fervor for the pure electric vehicle company, but since then, that enthusiasm has subsided. Similar to the electric vehicle boom, the stock price of Rivian has fallen by more than 80% since the company, which received support from Amazon, went public on NASDAQ on November 10, 2021, at $78 per share. This includes a decline of nearly 30% so far this year.

A variety of internal and external factors have led to the decline in the stock price of Rivian, but the company is still regarded as one of the most promising electric vehicle manufacturers that emerged in the early 2020s, as most of its peer listed companies no longer exist today.

Rivian Founder and CEO RJ Scaringe admitted that not everything is progressing as planned amidst supply chain shortages, geopolitical tensions, and consumers' slower adoption of electric vehicles than expected. However, he expressed confidence that the coming year will serve as a catalyst for both the company and its investors.

"2027 is indeed a turning point year for us," Scaringe said in an exclusive interview with CNBC. "I'm very excited to start truly demonstrating the business potential that we are so confident in."

R2 SUV

The optimistic assessment of Scaringe comes from the fact that Rivian is accelerating the production of the mid-size R2 SUV model – a vehicle designed to expand the brand into mainstream markets – while the company continues to invest in next-generation vehicle software and autonomous driving technology as well.

Scaringe indicates that the entry-level R2, which costs approximately $45,000, remains the core business for showcasing the company's latest technologies. Rivian delivered a record 19,248 vehicles in the third quarter of 2026, a year-on-year increase of 46%, and it was stated that R2 has become the company's best-selling model in terms of sales volume, surpassing both the R1 flagship model and the commercial van trucks.

Scaringe said, "This will define this business. The path to profitability, the path to significant revenue growth, is all built around R2 and some derivative models that come after R2."

In the most recent quarter, Rivian indicated that driven by the increased proportion of R2 and improvements in fixed cost leverage, the sales cost per vehicle in the automotive business improved by more than $12,000 compared to the previous quarter.

Rivian is also building a new factory in Georgia that will cost billions of dollars. Scaringe previously stated that this factory is crucial for the company to achieve the production volume necessary to achieve net profits.

Its sole factory located in Normal in Illinois has an annual production capacity of 215,000 units, including up to 155,000 R2 units, as well as R1 models and electric van trucks. Rivian indicates that after the initial construction phase is completed by the end of 2028, the Georgia factory's annual production capacity will reach up to 300,000 units.

Of course, all of this means additional capital expenditures, as well as pressure on the company to improve its profits.

Scaringe said, "We have decided to advance profitability at the same time... and to make substantial investments in our technology, especially autonomous driving."

Profit and Cash Consumption

The operational performance of Rivian is improving, but several Wall Street analysts expect that the company's investment needs will increase significantly in 2027.

Rivian achieved a consolidated gross profit of $176 million in the third quarter, but its automotive business recorded a gross loss of $80 million, while the software and services division achieved a gross profit of $256 million with a gross margin of 42%.

Wall Street analysts generally believe that the R2 listing of Rivian has shown encouraging early demand and reduced manufacturing costs, but they are concerned whether this is sufficient to offset the rising expenditures on autonomous driving, the construction of the factory in Georgia, and the ongoing cash consumption.

An analyst at Deutsche Commerzbank, Edison Yu, stated in an investor report on October 30 that after the company announced quarterly results that exceeded Wall Street's expectations, "financing has always been at the core of the long-term debates among Rivian investors. The attractiveness of years-long (even credible) paths to achieving cash flow break-even will decline for investors."

Rivian stated during the financial report conference call in late October that if available credit, cooperation funds with Volkswagen and Uber, as well as a $4.5 billion loan from the US Department of Energy for the Georgia plant, are taken into account, the company's total available liquidity is expected to be around $13 billion in the future.

Rivian indicates that as of the end of the third quarter, its balance of cash, cash equivalents, and short-term investments was $5.5 billion.

The company may still need to raise more funds. Scaringe indicates that Rivian plans to maintain an "opportunistic" attitude regarding any additional financing, as the company has previously raised funds through equity transactions with Volkswagen and Uber.

Scaringe said, "Based on our assessment of the future environment, we wish to continue to be in a position where we can invest in technology. Therefore, this means that we will remain opportunistic in terms of capital. But I want to make one thing clear: we are very focused on achieving profitability."

Autonomous Driving

The company has significantly upgraded the software and hardware capabilities of its vehicles in preparation for autonomous driving technology, which Scaringe refers to as "physical artificial intelligence."

The next step is to introduce "point-to-point" driving capabilities, which means that the vehicle can autonomously travel from one destination to another with the driver acting as a monitor, so as to intervene in case of any unexpected issues.

Tesla, the leader in electric vehicles in the United States, is currently the only automobile manufacturer to offer these features on its vehicles. Scaringe indicates that Rivian not only plans to catch up with Tesla's capabilities but also aims to enable vehicles to "see better" with a variety of sensor types, especially in adverse weather conditions.

"That's not the end... You can think of it as a starting point. From that moment on, there will be a comparison between Rivian and Tesla that is more akin to the comparison between Apple and Apple," said Scaringe.

In the coming weeks and months, this point-to-point feature will first be made available to employees, then rolled out to customers. Subsequently, it is expected that by 2028, autonomous vehicles will be launched in collaboration with Uber.

Scaringe indicates that he believes such technologies will become a differentiating factor for the company in the coming years.

“I think it will change from perhaps only 10% of car buyers considering it as one of the top five factors when making a purchase decision, to it becoming the most important first or second factor for the vast majority of buyers,” said Scaringe.

Rivian plans to provide more details regarding its artificial intelligence and autonomous driving initiatives during the second annual investor technology event on December 9th.

Analyst Itay Michaeli stated in a report to investors last week: "We believe this could be a positive catalyst, as it may pave the way for increased vehicle demand driven by AV functions in 2027 and higher software revenue, building on the growth seen in 2026."

According to the analysts' estimates summarized by FactSet, the current rating for Rivian stock is 'Buy', with a target price of $17.70. This indicates a potential increase of about 26% from Monday's closing price, but it is still far from its IPO price.