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The U.S. electric vehicle industry is going through turmoil, to put it mildly.
The industry has been saddled with tepid demand, production overcapacity, President Donald Trump’s auto tariffs, and an escalating price war that’s taking a toll on profitability. EV tax credits will also be phased out later this year, which presents yet another challenge for the industry, as automakers struggle to boost sales.
EV Competition Is Set to Intensify
Even U.S. EV market leader Tesla (TSLA) has reported a double-digit decline in deliveries for two consecutive quarters, following an annual drop last year, the first in the company’s history. Legacy automakers like Ford (F) and General Motors (GM) have scaled down their ambitious EV production targets with the profitability deadline getting kicked down the road. Things have been even troublesome for startups, many of which have simply gone out of business after collectively burning billions of dollars in cash.
In the U.S. startup EV space, Rivian (RIVN) and Lucid Group (LCID) apear to be the only credible players worth discussing. However, the competition in the industry is set to intensify amid the launch of new models, particularly in the budget range. In this article, we’ll look at Rivian’s outlook in light of the continued EV industry turmoil.

Rivian Has Impressed With Its Products
Currently, Rivian has a limited portfolio and sells the R1T pickup along with the premium R1S SUV. It also sells electric delivery vans (EDVs), and while it was previously selling these solely to Amazon (AMZN) – its largest shareholder – it has now started selling the vans to other customers.
While these are still early days, Rivian has several accomplishments to its name, and its cars have received rave reviews and score high on customer satisfaction. R1S is the best-selling electric SUV in the premium segment, which is no small achievement. Rivian’s EDV was the best-selling electric delivery van in 2024, outselling Ford’s E-Transit. Last year, the R1T became the first full-electric pickup to earn the Top Safety Pick+ award from the Insurance Institute for Highway Safety (IIHS).
Rivian Has Been Struggling to Grow Even as Losses Narrow
Despite having an attractive product portfolio, Rivian’s production figures tell a somber story. The company lowered its 2025 production guidance to between 40,000-46,000 from the previous guidance of 46,000-51,000. The company produced 49,476 vehicles last year and 57,232 vehicles in 2023. Essentially, 2025 looks set to mark the third consecutive year in which the startup reports a yearly fall in production.
However, Rivian has managed to produce gross profit and has posted positive gross margins for two consecutive quarters. While Rivian is still posting net losses, it has managed to narrow the loss per car significantly amid relentless cost cuts.

Importantly, it achieved positive gross profits in Q1 2025, even after excluding regulatory credits, which is quite encouraging. The company expects its more affordable R2 to have a better gross margin profile and said that its bill of materials would be half of R1. Rivian is also optimistic about achieving positive earnings before interest, tax, depreciation, and amortization (EBITDA) in 2027.
Rivian’s Balance Sheet Remains Healthy
Rivian has a reasonably strong balance sheet and held $7.2 billion in cash, cash equivalents, and investments at the end of March. Additionally, the company expects to receive another $3.5 billion from Volkswagen (VWAGY), even though some of it is subject to Rivian meeting preset milestones. Rivian is also set to receive a subsidized $6.6 billion loan from the Department of Energy to build its Georgia factory.
However, that money is yet to be paid out, and there is always a risk of it being rolled back, given President Donald Trump’s not-so-friendly view of electric cars. Rivian has tried to downplay that risk, though, emphasizing that the plant would help bring more manufacturing jobs to the U.S., which aligns with the administration’s goals.

What Will It Take for Rivian to Succeed?
Rivian fulfils the basic requirements that I believe every EV startup should have – a good product proposition, ability to raise cash, and a credible management team. However, that’s only a starting point, and Rivian needs to return to growth while improving its margins. Rivian has managed to turn gross profit positive, and the Volkswagen partnership will not only help it secure the much-needed capital, but also flow to its income statement through the joint venture. However, it now needs to scale up significantly to become a serious player in the industry, as the current sales volumes are simply too low to establish it as a credible challenger to incumbents.
The upcoming R2 vehicles, which start at $45,000, will be a good addition, but they will face steep competition. Incidentally, by the time Rivian starts delivering its R2, Tesla should be delivering its upcoming affordable model that has been in the works for a long time.
The withdrawal of EV tax credits is another blow to Rivian, as not only did its current portfolio benefit from these credits through a leasing loophole, but importantly, the R2 vehicles would have been eligible given their price tag.
Overall, Rivian continues to face multiple headwinds. A lot now rests on the launch of R2 products, which in some ways could be the “Model 3 moment” for Rivian. Tesla achieved scale and subsequent profitability with the launch of the Model 3 and Model Y, but that was a different time. Not only did Tesla have a literal free pass as no other company was really serious about electric cars, but there was also an initial set of EV enthusiasts craving new models. Cut to 2025, and there is no dearth of electric cars in the U.S., and the industry is quite oversupplied.
All said, I will continue to stick with Rivian for now and evaluate how the R2 plays out, as it could pretty well be the distinguishing factor between Rivian becoming a success story or fading away like most other startup EV companies.