Rivian Takes Earnings Hit-R2 Could Be the Stock's 2026 Lifeline

Rivian Automotive (NASDAQ: RIVN) is the latest high-profile electric vehicle (EV) automaker to release financial results, an event investors hoped would spark a recovery in the beaten-down stock. On August 5, Rivian shares closed at $12.15, down around 17% over the past 52 weeks.

Many Wall Street analysts have seen the stock as significantly undervalued, with recent price targets coming in as high as $18.

After-hours trading on August 5 didn’t show the stock much grace; shares fell around 5% post-earnings. However, there is still reason to believe Rivian can make a significant move to the upside. Let’s get an updated perspective on the company with Q2 now in the books.

Rivian’s Results: Profitability Trends Shift Into Reverse

In Q2, Rivian posted revenues of $1.30 billion, an increase of 12% from a year ago. This was just slightly higher than the $1.27 billion Wall Street projected. The company’s diluted loss per share was 97 cents, an approximately 33% improvement over the same period last year. However, this significantly missed Wall Street's expectations, which saw the company losing only 65 cents per share.

Rivian’s gross margin was -16%. This comes after the firm posted its first positive gross margin in Q4 2024 of 10%, and after the figure moved up to 17% in Q1. Tariffs impacted their supply chain, influencing vehicle production to fall around 57% from Q1.

Rivian also updated its adjusted 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance. The company now expects an EBITDA loss of between $2 billion and $2.25 billion, around $325 million more than its previous midpoint estimate.

Credits to EV buyers are set to expire on Sept. 30, significantly impacting its outlook. Rivian also did not announce any autonomous vehicle partnerships, unlike competitors who recently did.

2026 Could Be a Make-or-Break Year for Rivian

Despite these disappointing earnings results, investors should be squarely focused on 2026. The company’s R2 vehicle, slated to launch in the first half of next year, will show whether Rivian can be successful in the long term.

Notably, Rivian maintained this R2 launch timeline.

The company also states that it has locked in the materials costs for R2, which are 50% lower than those of R1. This should go a long way in helping Rivian reach a sustainably positive gross margin.

The company refused to provide R2 pre-order numbers but said it remains “extremely bullish” on the vehicle. The company notes that SUVs are the largest vehicle market in the United States. R2’s price of around $45,000 to $50,000 simply isn’t available to consumers interested in electric SUVs.

If R2 gains the traction Rivian hopes for, it could be a game-changer for the company. However, failure to show strong R2 demand in 2026 or disappointing production numbers would greatly hurt investor confidence.

Rivian Looks to Buck the Trend of Disappointing EV Returns With R2

Overall, betting on EV-makers outside of the market leaders has been a losing proposition for investors. Only three EV-centric manufacturers: Tesla (NASDAQ: TSLA), BYD (OTCMKTS: BYDDY), and Li Auto (NASDAQ: LI), have managed to achieve true profitability.

They are the only three stocks in this group that have generated substantially positive returns since going public. Tesla and BYD’s lifetime returns stretch north of 10,000%. Meanwhile, Li has achieved a total return of 55% since going public in mid-2020.

Still, that’s only around half the return of the S&P 500 Index over that period. Excluding the impact of first-day price action, essentially every other EV-centric manufacturer has provided a negative return over their lifetime. As of the August 5 close, Rivian shares are down around 88% since going public.

This doesn’t mean that all hope is lost for Rivian, but rather shows how difficult it is to build a successful EV business. Doing so is a long, grinding process, hampered by the high costs of manufacturing electric vehicles.

Past returns don’t guarantee future returns, but this phenomenon in the EV industry is still essential for investors to consider. If Rivian hopes to break the trend of fledgling EV performance outside of leaders in the space, the R2 is its ticket to doing so.

Still, with the company’s pattern of inconsistent results, the stock remains one investors should be cautious of. Further R2 updates should be closely watched as the company looks to turn its fortunes.

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The article "Rivian Takes Earnings Hit—R2 Could Be the Stock's 2026 Lifeline" first appeared on MarketBeat.