TLDR
- Baird upgraded Rivian to Buy with a $25 price target, up from $14
- R2 platform priced at $45,000 launches mid-2026, targeting mass market buyers
- EV tax credit removal cut 2026 sales estimates from 97,000 to 66,000 vehicles
- Rivian trades at 4x sales versus Tesla’s 17x sales multiple
- Volkswagen partnership worth $5.8 billion validates Rivian’s technology platform
Rivian received a major upgrade Thursday as Baird analyst Ben Kallo shifted his rating to Buy from Hold. The price target jumped to $25 from $14.
The catalyst? The upcoming R2 platform launching in mid-2026.
“2026 is the year of R2,” Kallo wrote. He believes the new vehicle line will boost Rivian’s brand and product demand.
Shares rose 3.6% to $18.27 in premarket trading. The stock has gained 33% year-to-date.
Moving Beyond Luxury
Rivian currently sells two vehicles: the R1T pickup and R1S SUV. Both carry price tags above $70,000, limiting their market reach.
The R2 changes that dynamic. At $45,000, it competes directly with popular models like the Toyota RAV4 and Tesla Model Y.
This pricing strategy opens up the largest vehicle segment globally. Analysts expect the shift to drive revenue growth of 28% or more in 2026.
Kallo highlighted that Rivian’s autonomous driving work, including custom chip design, strengthens its long-term competitive position. The company recently launched Autonomy+ software for $2,500 upfront or $50 monthly.
That recurring revenue model mirrors what Tesla has built with its software offerings.
Tax Credit Headwinds
The upgrade comes as EV makers face challenges. Sales dropped in October and November after the federal $7,500 tax credit ended in September.
Wall Street slashed Rivian’s 2026 delivery estimates from 97,000 to 66,000 vehicles. The company expects to deliver around 43,000 vehicles in 2025.
Despite the reduced estimates, Kallo believes the R2 product cycle can overcome these headwinds. “We want to own shares into the new product cycle,” he stated.
Only 30% of analysts rate Rivian as Buy, compared to 55% for S&P 500 stocks. The average analyst price target stands at $16.
Technology Platform Play
Rivian’s $5.8 billion partnership with Volkswagen validates its electrical architecture. The deal positions Rivian as more than just a vehicle manufacturer.
If the company secures additional licensing agreements, it could become a platform provider for other automakers. This would create high-margin revenue streams beyond vehicle sales.
At a $22 billion market cap, Rivian trades at 4x sales. Tesla, by comparison, carries a $1.6 trillion valuation at 17x sales.
The valuation gap creates upside potential if Rivian executes its R2 rollout successfully. The company is launching the platform within existing manufacturing capabilities, avoiding the capital-intensive expansions that nearly bankrupted Tesla during its Model 3 ramp.
Rivian is expected to deliver about 66,000 vehicles in 2026 if production follows the planned trajectory. The R2 platform represents the company’s transition from a niche luxury brand to a mass-market competitor.
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