Rivian Just Raised Guidance. So Why Is This Stock Falling?
Rivian is producing more cars than it expected and just raised its full-year production guidance.
Overview
Rivian (NASDAQ: RIVN) is an electric vehicle start-up, trying to build a car company from scratch. That's a difficult, time-consuming, and expensive task. But Rivian has made material strides, including effectively ramping up its production. That success was on full display in the second quarter, when Rivian beat its internal production projection and upped its full-year production target. Here's why the stock has tumbled despite the good news.
The big story for Rivian today is the launch of its R2 truck, targeted at mass-market customers. Its previous trucks were expensive, high-end products. If the company has any hope of turning a sustainable profit, it needs to materially increase its production numbers so it can spread its costs over more vehicles. If the R2 is a success, Rivian will have a clearer path toward that goal.
Image source: Rivian Automotive.
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Originally published at www.fool.com.