Electric pick-up startup Rivian stock (NASDAQ
NDAQ
: RIVN), which sells the R1T pickup trucks and R1S SUV, has gained by about 35% this year, as the production bottlenecks that weighed the company down over 2022 show signs of easing. For Q3 2023, the company delivered 15,564 vehicles, beating market expectations of about 14,000 units. This is also a considerable increase from the 12,640 cars the company delivered in Q2 and the 7,946 units delivered in Q1. The company expects to produce 52,000 vehicles this year, marking an increase from the 24,337 units produced in 2022. Rivian also appears to have steered clear of the current price war in the EV space. While average EV prices stood at about $53,400 as of July 2023, down from $70,000 a year ago per Cox Automotive, Rivian indicated in its last earnings call that it would not slash prices. This indicates that demand for the company’s vehicles remains robust, with Rivian indicating that its current orders will take several months to fulfill at current production rates.
Interestingly, Rivian has had a Sharpe Ratio of -0.6, lower than 0.6 for the S&P 500 Index over the same period. This also falls short of the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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