Most electric car stocks have struggled in 2025. Rivian Automotive (RIVN 1.32%) is no exception, falling some 20% this year, at recent prices. And according to several valuation metrics, shares are the cheapest they’ve been in years even though the company is about to hit a major inflection point for growth.
If you’re thinking about buying this growth stock at a discount, there’s one number you should be tracking closely.
This number is critical for Rivian
Last quarter, Rivian revealed some surprising news: a positive gross margin. For the first time in company history, Rivian made money on the cars it sold to customers. Previously, it had been booking a loss for every vehicle it sold, meaning its losses widened even as sales grew. After years of negative gross margins, however, the company finally proved to the market that it could generate profits, at least on a per-vehicle basis.
RIVN Gross Profit (Quarterly) data by YCharts
This wouldn’t have been surprising to investors who trusted management’s guidance. Rivian CEO R.J. Scaringe had been promising investors that the company would achieve positive gross margins by the end of the year. But just 12 months ago, the company was losing more than $30,000 on every vehicle it sold. Flipping that number to a positive gross profit was quite an achievement.
Management now expects to start shipping its first mass market model, the R2, in early 2026. This affordable vehicle — expected to debut under $50,000 — has the potential to dramatically increase sales. And the recently achieved positive gross margins should give Rivian the capital runway to reach that inflection point. That is, if positive gross margins are sustained.
That’s why I’m paying very close attention to what happens with Rivian’s gross margin over the next few quarters. If it slips into the negative again, perhaps the flip to profitability was mostly an accounting maneuver. But if the gross margin remains positive, that’s a huge reason to be confident in the company’s ability to survive financially until 2026, when perhaps the greatest growth inflection point in company history will begin to take root.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
