Rivian had a tough couple of years, as unprofitable startups are more vulnerable to the adverse external environment from high interest rates and lingering inflation. This has softened EV demand and deliveries have been disappointing in recent quarters. Highlighting the challenges, executives believe 2024 production will not surpass that the last year. But the large output-delivery gap of Q2 shows that Rivian is offloading its inventory.
Rivian is making the right moves to turn things around and it will be launching two smaller EVs, starting in 2026. These are crucial for its future, as they will help it increase its customer base, stop the cash burn and eventually make money. The recently announced cash injection from auto giant Volkswagen can help it whether the storm and accelerate its progress.
These developments have helped the stock to relief rally from the April record lows, bringing it to a critical technical juncture. RIVN tries to take out the 38.2% Fibonacci of the slump for the end of 2023 and the EM200 (black line). Surpassing them would shift momentum to the upside and facilitate further gains.
Despite the turnaround plan and promising developments recently, the off-road EV maker is not out of the woods yet. On the technical front, a rejection of the aforementioned critical resistance cluster would reaffirm the bearish bias and enhance risk of lower lows.
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