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

Detroit — Rivian Automotive They will put artificial intelligence behind the wheel and try to convince investors that the future could be more profitable than the past.

The all-electric vehicle maker will hold its first Autonomous Driving and AI Day on Thursday, as its core business of manufacturing and selling EVs has not performed as well as expected since its initial public offering in 2021.

The company’s stock price has since fallen more than 80% as sales and production fell behind schedule due to internal and external challenges. The company also continues to lose billions of dollars each year despite significant cost savings and increased software revenue thanks to a multi-year, $5.8 billion joint venture with German automaker Volkswagen.

CEO RJ Scaringe has consistently pitched the company as a technology play, from initially touting cloud-based technology and a “vertically integrated ecosystem” to more recently emphasizing new “zone” software architectures and aspirations for AI.

But the pressure is on for Rivian to make it happen. The company has strategically brought its software and automation efforts in-house to unlock future growth potential for investors and expand its customer base amid slowing EV sales and regulatory changes.

“Longer term, we believe what differentiates Rivian’s self-driving capabilities is our end-to-end AI-centric approach,” Scaringe said last month on the automaker’s recent quarterly investor call.

Rivian is following the strategy of other “pure EV” automakers, especially in the United States. tesla.

For more than a decade, the U.S. EV leader has promised to upgrade its vehicles to self-driving cars, allowing them to travel across continents while they sleep or without human intervention. The company launched a robotaxi pilot with a human safety driver this year in Austin, Texas, and plans to expand it to new markets in the U.S. next year.

Fellow EV car manufacturers clear The company recently partnered with AV startup Nuro to bring driverless capabilities to its EVs.

But Wall Street isn’t entirely buying the hype.

Morgan Stanley downgraded Rivian to underweight this week, citing slowing EVs and Rivian’s lack of “the scale and balance sheet to support the capital intensity” to reinvest in the current “industry hype cycle” around AVs and AI. We also downgraded Lucid and Tesla for one or both of these reasons.

“After a surprisingly resilient 2025, we are taking a more cautious view of the auto industry heading into 2026,” Morgan Stanley analyst Andrew Percoco said in a note to investors on Sunday.

Scaringe said AI Day will include a detailed look at the computing power of Rivian’s new vehicles, including its upcoming R2 SUV. Self-driving car platform. A data flywheel that uses data input to continuously improve the product.

The move is expected to boost confidence in Rivian’s future vehicles and technology, which Wall Street analysts believe could be licensed to other companies.

Rivian currently owns Tesla, general motors, ford motor When it comes to advanced driver assistance systems (ADAS), it’s similar to the German luxury brand. While that feature has only recently allowed some drivers to take their hands off the wheel while traveling on the highway in certain situations, other automakers have already reached this milestone.

Rivian’s AI Day comes more than four years after Tesla became the first automaker to host such an event. Rivian is regularly compared to Tesla, but AI Day is expected to focus on vehicle and support software efforts rather than non-core businesses like humanoid robots, as Tesla has done.

Wall Street analysts generally expect Rivian to provide more information about the future features of its vehicles on Thursday.

“Management is likely to provide an updated timeline for next-generation features, and perhaps a better understanding of the costs and resources needed to achieve its goals,” Deutsche Bank analyst Edison Yu said in a note to investors. “Broadly speaking, the company is hinting at a vertically integrated, AI-centric autonomous platform that digests raw multimodal sensor data to train models at scale.”

With the growth of AI technology over the past year, advanced driver assistance systems and self-driving cars are once again attracting the attention of investors and car companies.

The automotive industry has been working towards true AVs for some time, with little other success. google– Supporting Waymo and increasingly Tesla’s ADAS capabilities. But insiders and experts believe AI could finally unlock the technology’s true potential.

“We believe RIVN will demonstrate why it should be considered a serious player in the U.S. AV industry, which is currently viewed primarily as a two-player game between Tesla and Waymo,” Barclays analyst Dan Levy said in a note to investors on Friday.

Wall Street analysts expect Rivian to eventually focus on its software to enable more advanced ADAS features, such as allowing vehicles to drive themselves under certain circumstances.

Scaringe said the company expects to expand use cases for the hands-free system to “almost every road” in the short term, and to eyes-free driving in a few years. He recently expressed support for lidar (light detection and ranging systems), which allow vehicles to better detect or “see” their surroundings.

“We applaud Rivian’s pivot to autonomy, especially given our view that Level 3 autonomy will be an important step for all OEMs (original equipment manufacturers). The company’s goal of insourcing could make autonomy a profit center, especially given the company’s liquidity situation,” RBC analyst Tom Narayan said in a note last week.

Rivian’s current vehicles have an array of radars, cameras and other sensors, but no LIDAR.

SAE International, formerly known as the Society of Automotive Engineers, characterizes vehicle autonomy from Level 0 to Level 5. The highest level, Level 5, is fully autonomous cars, with each step from Level 0 adding technology that allows human drivers to be more “outside the net”.

Vehicles on U.S. roads today have varying levels of autonomy, but almost all are classified as Level 2 (which allows drivers to take their hands off the steering wheel in certain situations) or lower, including vehicles with cruise control or “adaptive cruise control.”

These days, many companies are focused on extending their ADAS systems beyond Level 2, where vehicles can drive nearly autonomously under certain conditions.

Industry experts also question the demand for AV technology. general motors first offered hands-free driving technology in 2017, but rollout was slow and adoption rates were low after free trials ended.

Even at Tesla, considered a software and technology leader with “tech-savvy” buyers in the U.S., only about 12% of its customers paid for its top-of-the-line “FSD” system, which can control the vehicle in many situations, the company recently announced.

Despite Rivian’s revenue falling 14% through the third quarter and the company’s downward guidance, Rivian’s stock has risen more than 30% this year on higher operating profits and investor optimism.

The bullish move is being driven by the company’s new technology rollouts and the launch of its new R2 car, scheduled for the first half of next year.

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

“Investors think it’s unlikely that RIVN will be bullish on the case for catching up with Waymo/Tesla in the AV space, and expect test drives and a superior technology stack to be unlikely to move the stock price (which is likely already factored into the stock price),” Levy said.

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

—CNBC’s Lora Kolodny and Michael Bloom contributed to this report.