Rivian‘s cash burn will “remain significant” over the next two years as the EV maker ramps up its R2 SUV and builds a plant in Georgia, Jefferies said on Tuesday.
The warning came even as the firm raised its price target on the stock and cast the company’s new share sale as a boost to its funding.
The measured take from Jefferies landed as the market delivered a harsher verdict, with a dilutive $1.2 billion equity offering driving Rivian shares down about 22% from the level they held before the sale was announced.
The stock had traded at $20.25 shortly before the after-hours announcement on Monday and changed hands at $15.75 as of publication time during Wednesday’s pre-market session.
Rivian fell 18.1% on Tuesday to close at $16.49, cutting its market value to $20.8 billion, and extended the decline into Wednesday.
The slide erased a roughly 23% advance the stock had built over the prior month, leaving it down about 16% for the year, though still up around 25% over the past 12 months.
As seen with several other EV makers such as Lucid, XPeng or Nio, Rivian trades far below the roughly $150 billion valuation it briefly commanded in 2021, one of the largest US market debuts of that year.
Rivian priced 75 million new shares, about 6% of its base, at $15.50 each, well below where the stock had traded.
What Jefferies Said
Jefferies analyst Owen Paterson raised his price target to $17 from $16 while keeping a Hold rating, in a note first obtained by PriceTarget.
Paterson framed the timing as opportunistic, writing that Rivian was using a rally in its shares after its second-quarter volume disclosure to raise equity.
He said details on the delivery beat were limited but assumed a mix of commercial-van sales, regulatory-credit income and R2 volume, which he argued supported a credible path to positive gross margin by year-end.
On the balance sheet, Paterson wrote that cash burn would stay heavy through 2027 and 2028 on the production ramp and capacity build, but that the proposed raise materially improved the funding profile.
Jefferies also lifted its second-quarter and full-year volume estimates to match Rivian‘s raised guidance.
The stance cast the fresh equity as buying Rivian room to execute the R2 ramp rather than as a signal of distress.
JPMorgan raised its target to $15 while keeping an Underweight rating, Baird reaffirmed an Outperform call at $23, and HSBC’s Neil Churchill called Rivian “loss making and cash burning,” questioning whether the Volkswagen and Uber investments would prove enough.
The Offering
Rivian priced the sale of 75 million shares at $15.50 apiece on Tuesday, for gross proceeds of about $1.2 billion before fees, with underwriters holding a 30-day option on up to 11.25 million more.
The figure came in below the roughly $1.5 billion the deal implied at Monday’s $20.14 close, as the offering priced into a falling stock, a dynamic that tends to pull shares toward the deal level.
Rivian said it would use the proceeds for general corporate purposes, including equity contributions required under its US Department of Energy loan, the $4.5 billion financing tied to its Georgia plant.
The company renegotiated that loan in April, cutting it from $6.57 billion and narrowing it to a single production phase of up to 300,000 vehicles, after the Trump administration pulled back federal support for electric vehicles.
The company, founded and led by RJ Scaringe, is spending heavily to scale the R2, its first genuinely mass-market model and the vehicle it is counting on to reach profitability, while standing up the second plant in Georgia.
The raise also comes against a weakened US electric-vehicle market, after the removal of the $7,500 federal tax credit stripped away a key demand support this year.
The raise adds to $1 billion in Volkswagen funding received in April and up to $1.25 billion committed by Uber, the outside capital Rivian is stacking to bridge to profitability.
A Beat That Didn’t Hold
The sale accompanied preliminary second-quarter figures.
Rivian projected revenue of $1.55 billion to $1.65 billion, above the roughly $1.45 billion analysts expected and up from $1.30 billion a year earlier, and said cash and short-term investments had risen to about $5.3 billion.
The estimates were not enough to hold investors, who fixed instead on the swelling share count.
One reason the beat is hard to read is its composition, since Rivian‘s 12,194 second-quarter deliveries include its commercial electric vans, the delivery vehicles co-developed with Amazon, a major shareholder and its largest commercial customer.
The disclosure does not break out how many passenger vehicles, the R1T, R1S and R2, the company handed over, leaving the pure-consumer figure unknown.
Even with about $5.3 billion in cash, lifted by the Volkswagen and Uber money rather than by operations, Rivian has continued to consume roughly $1 billion a quarter, leaving thin cushion for the ramp ahead.
Q2 Deliveries
Rivian delivered 12,194 vehicles in the second quarter, beating its guidance, and raised its full-year outlook to 65,000 to 70,000, a target that rests almost entirely on the R2 accelerating through the second half.
The company has guided to 20,000 to 25,000 R2 deliveries this year, the bulk after June, so any sustained slowdown in matching and handovers would bear directly on whether it can hit those numbers.
With 22,559 vehicles delivered in the first half, Rivian must roughly double that pace to reach even the low end of its raised range, leaving little slack if R2 handovers stall.
Rivian had appeared to be building momentum, with VIN assignments climbing toward 2,000 a week and the first customer cars reaching new states through late June.
Full second-quarter results are due after the close on July 30.
