In this article I will provide information about Rivian stock price prediction
2024,2025,2030,2040 & 2050.
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Valuation Measures
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value/ price
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Market Cap.
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29.54B
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Enterprise Value
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18.02B
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Enterprice Value/Revenue
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17.18
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Return on Assets (TTM)
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34.15%
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S&P 500 52-week change
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-15.32%
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52-weel High
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126.75 USD
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52-week low
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29.25USD
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50/200 day moving averages
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33.74 / 36.65 USD
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Enterprise Value/EBITDA
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2.64
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Shareowners are becoming confident in the future of electric
vehicles in 2021. As a result, many companies are making big investments in EV
startups to gain an edge over their competitors. The auto industry is also
undergoing a significant transformation that requires new technologies and
production methods. So let us explore some key trends influencing the growth of
this sector. It’s time for the next chapter, let’s get into investing now!
Trend
1 – Innovations and R&D
Currently, there is an enormous demand and shortage of electric
cars. Companies like Tesla are taking advantage of innovations and research to
develop new features that will make them better engines of mass transportation.
They have already started working on autonomous driving technology that can
save energy and reduce damage to human beings. Although no one would deny that
EVs are going to be more expensive than gas or diesel-powered models, they are
expected to become cheaper and more widely available. This means the world will
increasingly rely on electric automobiles. It is not just the US but also China
has taken steps, which includes tax incentives and subsidies. For example,
Beijing announced plans to spend $12 billion at the end of 2020 to fund a
public charging network, while Shanghai, Shenzhen, Hangzhou, and other cities
have started introducing green pricing policies. In addition, automakers often
try to improve efficiency by increasing battery capacity and improving electric
traction. These improvements allow manufacturers to produce larger,
longer-range batteries with less frequent maintenance for lower prices.
Overall, we expect to see greater innovation as carmakers work toward
developing zero-emissions vehicles.
Trend
2 – Growing Disposable Income Levels
People are moving towards more affordable vehicles, including
EVs. According to McKinsey Research estimates, half a million people worldwide
are expected to own fully sustainable personal or commercial vehicles within
five years. Therefore, investors will pay attention to how these automakers
address consumer preferences and appeal to different segments of consumers. For
instance, it is important to consider vehicle types. Do you want sports cars
(or sport utility vehicles)? Are you interested in large SUVs? Is performance
an issue (or no)? Many buyers will always prefer something that fits their
lifestyle. Additionally, they might demand certain features such as heated
seats, advanced infotainment systems, active safety tech, etc. To solve this
problem, manufacturers will introduce different categories of electric
vehicles. Besides automotive engineers, companies such as Intel and Google have
invested significantly in AI. They aim to deliver superior artificial
intelligence (AI) products. Some of the most well-known examples include object
detection, face recognition, image translation, visual analysis, audio and
speech processing, natural language processing, music generation and
manipulation. However, due to increased competition and low profit margins,
many carmakers are focusing more on cost reduction of manufacturing process,
increasing sales via digital platforms and rebranding. Hence, if one wants to
buy electric vehicles, they should look out for the brand name but also the
reputation for high quality. Finally, when it comes to financing, customers
will always ask about depreciation charges. If an automobile gets damaged after
purchasing, then it becomes costly to repair and re-sell. On the other hand,
buying used electric vehicles gives the owner a higher resale value and enables
him/her to sell them, rather than buying new ones on another seller’s lot.
Thus, OEMs will increase investment by providing discounts on warranty and
charging stations. Lastly, car dealers will focus more on lowering total
ownership costs by offering customer benefits, such as financing options and
special offers.
Trend
3 – Increasing Demand From Emerging Markets
As mentioned above, countries like China and India continue
exploring new markets since they offer a faster path to market share for
established brands (such as GM). Also, the government in those places provides
extensive support to startups by creating favorable business environments,
especially for clean mobility. Currently, emerging economies like Thailand,
Indonesia, Philippines, Brazil, Kenya, Mexico, Nigeria, Pakistan, Bangladesh,
Sri Lanka, Tanzania, Morocco, Turkey, Zambia, Ghana, Colombia, Mauritius,
Singapore, and Vietnam all offer lucrative opportunities for carmakers.
Moreover, the rise of middle class populations coupled with rising disposable
income levels makes these nations a great place for innovative automakers. By
2030, according to IMF forecasts, global gross domestic product (GDP) will grow
by 7.7% in Southeast Asia and 4.4% in Latin America. In contrast, Europe will
experience 9.2% growth. All told, emerging markets provide ample space for
businesses in terms of potential new revenue streams, infrastructure building,
and consumer base. What’s more, consumers can afford relatively higher purchase
prices at premium brands, which would positively affect the company’s bottom
line.
Trend
4 – Growth Opportunities Among Manufacturers
Although we’ve seen many manufacturers in recent times struggle
with supply chain issues and delays in deliveries, others are thriving. Here
are few reasons why carmakers should keep investing in electric vehicles:
1.There are currently two major problems plaguing automotive
makers—demand destruction and supply destruction. Supply destruction refers to
limited availability of raw materials needed to assemble finished goods, both
in scale and variety. When it comes to electric cars, there is virtually no
shortage of batteries, motors and chargers. Unlike conventional vehicles,
manufacturers cannot import spare parts from countries like Australia, Indonesia,
South Korea, etc., as the whole system must be created domestically so that no
single country can dominate the market. At the same time, raw materials are
mostly sourced from developed regions.
2.Demand destruction occurs when consumers shift away from using a
particular product or opting for substitute goods because of rising prices. One
case is when Honda replaced its traditional three-motor powertrain for a
four-motor model, which was marketed as “All Wheel Drive.” Its
initial launch was priced at $10,000 and the price has fallen from there by
only $1000. Such trend is very common in industries, even though it may appear
counterintuitive. People no longer use a classic or luxury car because they can
see that there really isn’t any reason to spend money on them anymore. Instead,
they buy the latest version of a smartphone (which has almost the exact same
motor as your standard cellphone), instead. Similarly, in the last decade, the
popularity of electric motorcycles grew exponentially. During that period,
prices dropped to practically nothing, but their popularity stayed unchanged.
Today, there are many manufacturers who charge thousands of dollars on their
vehicles, yet they still generate revenue.
3. Electric Vehicles (EV) present unique challenges: sustainability
is critical to carmakers. Since it was first introduced, EVs need continuous
electricity to remain operational. And it is essential to maintain a balance
between electricity demand and supply and to ensure that electricity prices do
not push up commodity prices as well. With growing concerns over climate
change, governments around the world have initiated ambitious efforts to cut
emissions. Cars also come with carbon emissions in the form of tailpipe
pollutants, water usage, and noise pollution. While EVs are estimated to
require a range of 500 km-per-day to cover metropolitan areas, city dwellers,
or long trips, they are likely to take longer. Most importantly, EVs require
constant charging, which is typically done through regenerative braking or
plugging stations. Charging is usually provided by either a grid connection or
charging stations within private properties. As of 2019, it is expected that
60% of all electricity generated globally from renewable sources, up from 38%
just a year ago. Hence, drivers will continue to invest in car electrification.
4.Recent Trends
According to IHS Markit report, Chinese EV sales reached $33.5
billion in 2019 in the second quarter and are predicted to reach $66.9 billion
by 2025. In Q3 2022 alone, EV sales jumped by 68%. Additionally, a number of
state leaders from China and across Asia have put huge investments into the
automotive industry in recent months. Specifically, China has unveiled several
initiatives to incentivize EV manufacturing during the pandemic, including a
100,000 CNY ($15 billion) pledge to help accelerate local production of
batteries. Meanwhile, President Xi Jinping also announced funding to set up a
comprehensive plan to deploy and promote EVs in the country. A related
announcement, which included the establishment of an Automotive Innovation
Center of Excellence (Ai-CORE), aims to boost collaboration among suppliers of
components and complete the transition of the entire industry.
5 – Market Outlook
Although the outlook for EV’s market remains uncertain, there is
hope. The pandemic has accelerated the move toward electrification.
Furthermore, EV demand surged when governments mandated lockdowns and social
distancing restrictions. Consequently, demand from households began recovering
and became stagnant from late 2020 until early 2021. Now, as states open up
again, more and more consumers are embracing electric vehicles. We believe
electric vehicles will become mainstream in 10 years’ time. However, before
they become everyday vehicles, they may need to undergo extensive testing and
go through rigorous certification programs. After assessing all these factors
and considering various environmental scenarios, we believe the global electric
passenger car industry will achieve annual unit sales of 6 million units in
2024 and 13.4 million units in 2025. Of course, it is difficult to predict what
the global economy will look like in 2025. Still, it is reasonable to assume
that the U.S. will continue leading the way, given the rapid pace of development
we are witnessing today, along with a strong regulatory framework and steady
consumer demand.
6 – Top Strategic Investing Areas
There are several strategic areas that could benefit auto owners
if they choose EV. First, there is no doubt EVs are likely to impact the
overall business operations in terms of revenues and expenses over the coming
years. Second, electric vehicles are gaining a lot of importance as they become
safer and cleaner vehicles that operate without fuel even if they run on
gasoline or diesel