Rivian turns to AI, autonomy to woo investors as EV sales stall

DETROIT — Rivian Automotive Artificial intelligence will be allowed to take the wheel to try to convince investors that its future could be more lucrative than its past.

All-electric vehicle maker will host its first event “Autonomy and Artificial Intelligence Day” It said Thursday that its core business of manufacturing and selling electric vehicles has not been as productive as expected since its initial public offering in 2021.

The automaker’s shares have since lost more than 80% as internal and external challenges caused sales and production to be slower than planned. The company also continues to lose billions of dollars annually, despite significant cost reductions and gains in software revenue thanks to a multi-year, $5.8 billion joint venture agreement with German automaker Volkswagen.

CEO RJ Scaringe has always sold the company as a tech play in a variety of ways, from initially touting its cloud-based technology and “vertically integrated ecosystem” to more recently touting its new “regional” software architecture and AI ambitions.

But there is pressure on Rivian to capitulate. It tactically deployed software and automation efforts to unlock future growth potential for investors and try to expand its customer base amid slowing electric vehicle sales and regulatory changes.

“Longer-term, we believe our end-to-end AI-centric approach will be what will differentiate Rivian’s autonomous capabilities,” Scaringe said last month during the automaker’s latest quarterly investor call.

Rivian follows strategy of other “pure EV” automakers, especially in the US Tesla’s.

For more than a decade, the US EV leader has been promising owners that their cars could be upgraded to autonomous vehicles that could work for them while they slept or travel cross-country with no human intervention. The company launched a pilot robotaxi service that includes human safety drivers in Austin, Texas, this year and plans to expand it to new U.S. markets next year.

Other EV automaker Lucid it also recently formed a partnership with AV startup Nuro to bring driverless features to its EVs.

But Wall Street isn’t entirely buying into the hype.

Morgan Stanley this week downgraded Rivian to underweight, citing the EV slowdown and that Rivian does not have the “scale or balance sheet to support the capital intensity” to reinvest in the current “industry excitement cycle” around AVs and AI. It also downgraded Lucid and Tesla for one or both of these reasons.

“We take a more cautious view of the Auto Industry heading into 2026 after a surprisingly resilient 2025,” Morgan Stanley analyst Andrew Percoco wrote in an investor note published Sunday.

Scaringe said AI Day will include an in-depth look at the computing power of Rivian’s new vehicles, such as the upcoming “R2” SUV; autonomous vehicle platform; and the data flywheel, where data inputs are used to continuously improve products.

Our hope is to increase confidence in Rivian’s future tools and technologies, which Wall Street analysts believe could be licensed to other companies.

Rivian currently lags behind Tesla and even legacy automakers. General Engines, Ford Motor and German luxury brands in the case of advanced driver assistance systems, or ADAS. Its features recently allowed some drivers to take their hands off the steering wheel while driving on the highway under certain conditions; This is a milestone that other automakers have already achieved.

Rivian’s AI Day comes more than four years after Tesla became the first automaker to host such an event. While Rivian is regularly compared to Tesla, AI Day is expected to focus more on vehicles and supporting software initiatives rather than non-core businesses like humanoid robots like Tesla.

Wall Street analysts generally expect Rivian to offer more details about the future capabilities of its vehicles on Thursday.

“Management will likely provide updated timelines on next-gen features and perhaps better size the costs/resources needed to achieve their goals,” Deutsche Bank analyst Edison Yu said in an investor note. “At a high level, the company has talked about a vertically integrated, AI-centric autonomy platform that digests raw, multi-modal sensor data to train large models.”

Advanced driver assistance systems and autonomous vehicles have once again become the focus of investors and automotive companies. Artificial intelligence technologies have grown over the past year.

SAE International, formerly known as the Society of Automotive Engineers autonomous driving For vehicles from level 0 to level 5. The highest level 5 is a fully autonomous vehicle; From level 0 onwards, each stage adds more technology and allows human drivers to be more “out of the loop.”

Vehicles on U.S. roads today have varying levels of autonomy, but nearly all are categorized as level 2 — allowing drivers to take their hands off the steering wheel in certain situations — or lower, including those with cruise control and “adaptive cruise control.”

Recently, many companies have focused on advancing their ADAS systems beyond level 2, where vehicles can largely drive themselves under certain conditions.

Industry experts also raised questions about the demand for AV technologies. General Engines It became the first company to offer hands-free driving technologies in 2017, but rollout was slow and adoption was low after free trials ended.

Even at Tesla, seen as a software and technology leader with “tech-savvy” buyers in the US, only 12% of customers paid for the high-end “FSD” system that can control the vehicle in many situations. the company recently said.

Despite Rivian’s sales falling 14% in the third quarter and the company’s downward guidance revisions, Rivian’s shares are up more than 30% this year, driven by increases in operating profit and investor optimism.

It is stated that the rise is due to the company’s introduction of new technologies and the launch of the new R2 vehicle in the first half of next year.

But given that these are both forward-looking catalysts, Wall Street analysts expect much of the upside potential to be priced into the company’s stock price now.

“We believe investors are less likely to be bullish if RIVN catches Waymo/Tesla in AV and expect test runs/an impressive tech stack to be less likely to move the stock (which is likely already embedded in the stock),” Levy said.

Rivian shares closed 0.1% higher at $17.71 on Tuesday ahead of the AI ​​event. The stock is up 33% this year, but that’s a far cry from expectations. The company’s IPO was $78 per share.