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Rivian Rallied, Tesla Stalled: Who is the Winner?

The electric vehicle bubble’s bust continued after Rivian (RIVN) posted Q3 results. After losing half its value this summer, why did investors dump shares while Tesla (TSLA) was steady?

Rivian, an EV truck supplier, posted solid revenue growth, up an astounding 150% Y/Y to $1.34 billion. It still lost $1.19 a share on a non-GAAP measure. The figure adjusts the $3.911 billion loss by adding back $606 million in stock-based compensation and another $667 million in depreciation and amortization.

It burned through $1.067 billion in negative cash flow. This is better than the $1.666 billion last year.

Investors initially bid RIVN stock up when the firm announced it was formally ending its exclusivity agreement with Amazon (AMZN). This implies an increase in addressable market for its commercial sales. However, it also suggests that Amazon may buy EVs, hybrids, and non-EV vehicles from other suppliers. In addition, it removes any buyout premium.

Still, Rivian’s ~$15 billion market capitalization is too big a cost for Amazon to absorb. It is currently awaiting approval to buy out Roomba vacuum supplier iRobot (IRBT) for nearly $52 a share. Last week, the stock traded at a $797 million market capitalization ($28.60). Markets doubt that Amazon will buy the firm.

Tesla is the winner in the EV space. It just cuts prices to protect its market share. The Cyber truck could pressure Rivian’s business further.