Here’s why Rivian has the potential to be a major EV player

Rivian Automotive (NASDAQ: RIVN) topped estimates during its second-quarter earnings release on August 11, reaffirming its 2022 production guidance of 25,000 units.   

The firm showed revenues of $364 million, beating estimates by $26.02 million, with earnings per share (EPS) of -$1.89, missing estimates by $0.13. After the earnings, RIVN shares surged as much as 7% on the day before, ultimately closing the session up 4%.

Meanwhile, Deutsche Bank analyst Emmanuel Rosner joined CNBC’s Squawk on the Street on August 12 to discuss why he is optimistic about the stock and why he sees the firm as a significant player in the electric vehicle (EV) market. 

“I think in the near term, it’s very much about operational execution and their ability to ramp up production. They’ve had tremendous issues since the IPO, but now there are signs things are getting much better; they reiterated their volume targets for the year, so if they can get this underway, I think there is extremely strong demand for their product, their order book keeps building up.”

He also added:

“There is a strong partnership with Amazon for the last mile delivery. The demand is there now; they have to provide the supply. It really has the potential to become one of the leading EV players down the line.”

RIVN chart and analysis  

The long-term trend is still neutral, but the short-term trend is positive, so the stock is getting more attention and possibly love from investors. In the last month, RIVN has been trading in the $30.86 to $40.56 range, and is currently, near the high of this range. 

Meanwhile, technical analysis shows a support zone from $36.56 to $36.83, while the resistance zone is between $38.91 and $38.96.   

TipRanks analysts gave a ‘moderate buy’ rating consensus to Rivian, seeing the average price in the next 12 months reaching $49.50, 27.25% higher than the current trading price of $38.90.

More benefits to come  

A further boon for the stock could be the $430 billion Inflation Reduction Act passed by Congress on August 12, which includes new rules governing the EV industry. Among other benefits, the Act should offer $7,500 EV tax credits, incentivizing the design and production of EVs and EV batteries in the US.

Further, the news of the Act boosted shares of Tesla (NASDAQ: TSLA) and Lucid (NASDAQ: LCID) as investors expect us EV producers to reap the most benefits.      

With odds now firmly stacked in favor of US EV producers, Rivian is in a position to benefit if it continues to perform and deliver its products on time.  

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