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Rivian’s AI, autonomy impress Wall Street, but EV and capital concerns remain
Rivian CEO RJ Scaringe at the company’s first “Autonomy and AI Day” on Dec. 11, 2025, in Palo Alto, California.
Lora Kolodny | CNBC
Rivian Automotive impressed Wall Street on Thursday with its plans for artificial intelligence, automation and an internally developed silicon chip, but significant challenges involving demand and capital remain for the electric vehicle maker.
Despite Wall Street analysts expressing some optimism following Rivian’s first “Autonomy and AI Day,” the company’s stock fell 6.1% to close Thursday at $16.43 per share. But shares recovered Friday to close at $18.42, up 12.1%
While the event didn’t cause many analysts to change ratings or price targets, Needham raised its price target on Rivian by 64% to $23 per share. The firm did so on the tech announcements and potential for future licensing deals, as well as higher-than-consensus expectations on deliveries next year of the company’s new midsize R2 SUV.
“RIVN signaled a shift from an [automaker] adopting autonomy to one leveraging AI to build end-to-end autonomy,” Needham analyst Chris Pierce said in a Friday investor note.
The company’s stock had ramped up heading into the AI Day, but many analysts believed the announcements from the event were already “priced in.” Shares also fell as OpenAI made its own AI announcement Thursday, revealing its most advanced model yet.
“We attended Rivian’s Autonomy & AI Day yesterday in Palo Alto and came away mostly impressed with the strategic direction outlined by management,” Deutsche Bank analyst Edison Yu said Friday in an investor note. “However, the stock’s weakness seems warranted given the run-up since earnings and lack of a major AI partnership/deal announcement.”
Rivian’s announcements included a proprietary chip, RAP1, designed for “physical AI,” namely autonomous driving; an evolved software architecture, or “brains” of the vehicle; a new AI assistant; and a road map for getting to “personal L4,” or fully self-driving personally owned vehicles.
The latter begins later this month with an update involving its hands-free driving system, followed by plans to continue to expand capabilities until vehicles reach full autonomy in the years ahead. Rivian did not disclose a time frame for the full autonomy or potential robotaxi fleet autonomous vehicles.
Leading up to the event, Rivian shares were up more than 30% to $17.50. Despite those gains, shares remain well off the levels of the company’s IPO of $78 per share in 2021.
Barclays analyst Dan Levy and others said while Rivian’s technology announcements, including the surprise proprietary chip, were impressive, the company remains a “show me” story amid more challenging market conditions.
“With RIVN facing a tougher path to breakeven on core vehicle sales alone, we believe with enhanced AV/AI capabilities RIVN is further paving the path to additional software/service revenues, which would be margin accretive,” Levy said Friday in an investor note. “To be clear, there is certainly a ‘show me’ element for RIVN on its capabilities.”
Challenges include slumping EV demand following the end of up to $7,500 tax credits in September, lack of other support under the Trump administration and internal struggles at the company involving products and capital.
Several analysts noted the adoption of advanced driver assistance systems remains low across the industry, even at U.S. EV leader Tesla, and Rivian is continuing to play catch-up to other companies that have offered such systems for years.
Shares of “pure EV” plays Tesla, Rivian and Lucid in 2025.
Rivian founder and CEO RJ Scaringe and other executives argued that the company’s vertical integration of in-house capabilities including software, AI, vehicle platforms and other technologies will enable the automaker to be more efficient, quicker and better than others.
“AI is enabling us to create technology and customer experiences at a rate that is completely different from what we’ve seen in the past,” Scaringe said during the event.
Such arguments, as well as the automaker’s prior $5.8 billion joint venture software deal with Volkswagen, have led Wall Street to price Rivian’s software business higher than its core of producing and selling EVs, given market conditions.
A $12 price target for Rivian shares from Morgan Stanley, which recently downgraded the company to underweight, includes $7 for software and services and $5 for its core automotive business. Several analysts added that Rivian might be able to license or sell its newest technologies, including chips.
“RIVN is developing a suite of hardware and software offerings to remain competitive in an Auto 2.0 world. However, several risks remain around demand, potentially limiting data capture needed to reach higher levels of autonomy,” Morgan Stanley’s Andrew Percoco said in a Friday note.
Morgan Stanley raised concerns about autonomy adoption rates, lackluster EV demand ahead of Rivian’s new “R2” vehicle next year and a prolonged path to profitability as reasoning for the rating confirmation.
Rivian R2 is showcased at the company’s first Autonomy and AI Day showcasing developments in self-driving technology, in Palo Alto, California, Dec. 11, 2025.
Carlos Barria | Reuters
RBC Capital Markets analyst Tom Narayan agreed: “The advancements enhance Rivian’s product offering but do not address ongoing concerns around liquidity and R2/R3 profitability.”
Rivian continues to lose billions of dollars annually, despite significant cost reductions and gains in software revenue thanks to its deal with VW.
Rivian ended the third quarter with $7.7 billion in total liquidity, including nearly $7.1 billion in cash, cash equivalents and short-term investments that Scaringe has said position the company “really well” for the R2 launch.
The R2 midsize SUV is crucial for Rivian — especially since it’s a major market in the U.S. With expectations of a $45,000 starting price, it is anticipated to broaden Rivian’s customer base and be a proof-point for the company’s efforts regarding profitability and cost savings.
Rivian’s current R1 pickup truck and SUV consumer models start at more than $70,000. It also builds electric delivery vans, largely for its biggest shareholder, Amazon, that start at around $80,000.
“Profitability pressure will likely intensify as Rivian rolls out its ~$45K R2 platform in the highly competitive mid-size SUV segment,” Narayan said. “While targeting a lower price point could increase market reach, the R1 platform’s struggles with profitability despite being nearly double the price of the R2 raise.”
Shares of Rivian, with a $22.5 billion market cap, are rated hold with a $15.43 per share price target, according to average ratings and estimates compiled by FactSet.
— CNBC’s Michael Bloom contributed to this report.
The former One Direction member-turned-solo artist appears on the Sunday Times list for the first time.
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Budget 2026: FM Nirmala Sitharaman gives a strong push to manufacturing, infrastructure and job creation, while proposing a simpler tax and customs system.
Finance Minister Nirmala Sitharaman presents the Union Budget 2026-27.
Budget 2026 Takeaways: Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026-27, giving a strong push to manufacturing, infrastructure and job creation, proposing a simpler tax and customs regime, and hailing the government’s modernisation drive as a “reforms express”.
The Budget 2026 is anchored around three ‘kartavyas’ — driving growth by enhancing productivity and competitiveness, building people’s capacity, and ensuring inclusive development under the vision of Sabka Saath, Sabka Vikaas.
In her ninth consecutive Budget in Parliament, Sitharaman laid out a multi-pronged strategy to sustain growth amid global uncertainty, including expanding domestic electronics and semiconductor capabilities, de-risking infrastructure projects, skilling India’s youth for emerging technologies, and easing compliance for taxpayers and importers.
Here are the key takeaways from Budget 2026 across manufacturing, infrastructure, skills, AI, taxation and customs duty.
Manufacturing Gets A Boost
Budget 2026 put a special emphasis on the manufacturing landscape in India. The outlay for electronics components manufacturing was raised sharply to Rs 40,000 crore, while new schemes for rare earth magnets, chemical parks, container manufacturing and capital goods seek to reduce import dependency, and strengthen domestic supply chains. Textiles got an integrated, employment-oriented package covering fibres, clusters, skilling and sustainability.
Infrastructure-Led Growth
Infrastructure got a boost with a higher capex allocation and initiatives like a risk guarantee fund to de-risk projects for private developers, new dedicated freight corridors and national waterways, dedicated REITs (real estate investment trusts) for recycling of significant real estate assets of central public sector enterprises (CPSEs), and a seaplane VGF (viability gap funding) scheme.
The Centre’s capital expenditure (capex) target has been increased to Rs 12.2 lakh crore for FY27, up from Rs 11.2 lakh crore earmarked for the current financial year. Moreover, maintaining the fiscal discipline, Sitharaman said the government expects the fiscal deficit to be at 4.3 per cent of the GDP in 2026-27, lower than 4.4 per cent projected for the current financial year.
Tier-II and Tier-III cities were placed at the centre of urban growth via City Economic Regions, backed by reform-linked funding.
“We shall continue to focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centres,” Sitharaman said in her Budget Speech.
Greater Emphasis On Skilling
The Budget placed renewed emphasis on the services economy as a jobs engine. A high-powered Education-to-Employment and Enterprise Committee will realign skilling with market needs, including the impact of emerging technologies.
Content creation and creative industries get a boost through AVGC labs in schools and colleges, support for animation, gaming and comics, and new institutional capacity for design and hospitality. Tourism-linked skilling, from guides to digital heritage documentation, signals a clear intent to convert culture and content into employment and exports.
“I propose to support the Indian Institute of Creative Technologies, Mumbai in setting up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges,” FM Sitharaman said. AVGC stands for animation, visual effects, gaming and comics.
AI & Semiconductors Push
Artificial intelligence (AI) was positioned as a cross-sector force multiplier rather than a standalone theme. The Budget provided a push to artificial intelligence (AI) by promoting adoption with governance, agriculture, education and skilling, including proposals for AI-enabled advisory tools for farmers and AI integration in education curricula.
On hardware, the semiconductor strategy expanded decisively under ISM 2.0 (India Semiconductor Mission 2.0), with focus on domestic equipment manufacturing, materials, research centres and workforce development, signalling a long-term commitment to building a resilient chip ecosystem in India.
Taxation, ITR, TDS, TCS
A major structural reform comes with the Income Tax Act, 2025, effective April 1, 2026, containing simpler rules and redesigned forms.
Budget 2026 provided compliance relief for individuals, including extended timelines for revising returns to March 31 from December 31 earlier, staggered ITR due dates, and easier filing of Form 15G/15H through depositories.
Individuals with ITR-1 and ITR-2 returns will continue to file till July 31, and non-audit business cases or trusts are proposed to be allowed time till August 31, according to the Budget Speech 2026-27.
“I propose to extend time available for revising returns from 31st December to up to 31st March with the payment of a nominal fee. I also propose to stagger the timeline for filing of tax returns. Individuals with ITR 1 and ITR 2 returns will continue to file till 31st July and non-audit business cases or trusts are proposed to be allowed time till 31st August,” Sitharaman said.
TDS (Tax deducted at source) rules were clarified for manpower services, while a rule-based system for lower or nil TDS certificates is proposed. TCS rates were cut to 2% for overseas tour packages, education and medical expenses under liberalised remittance scheme (LRS). Litigation is targeted through integrated assessment and penalty orders, lower pre-deposit requirements, and wider immunity provisions.
TDS on the sale of immovable property by a non-resident will be deducted and deposited through resident buyer’s PAN (Permanent Account Number)-based challan instead of requiring TAN (Tax Deduction and Collection Account Number), Sitharaman said.
Customs Duty Tweaks
Customs duty rationalisation continued with a clear focus on domestic manufacturing, energy transition and ease of living. Exemptions have been extended or introduced for capital goods used in lithium-ion batteries, critical minerals processing, nuclear power projects and aircraft manufacturing.
Personal imports will become cheaper with a reduction in duty on goods for personal use from 20% to 10%. Seventeen cancer drugs and additional rare-disease treatments were exempted from customs duty. Process reforms aimed at trust-based, tech-driven clearances, faster cargo movement and lower compliance costs, especially for exporters and MSMEs (micro, small, medium and enterprises).
STT On F&O Hiked
The Budget increased securities transaction tax (STT) on futures trading from 0.02% to 0.05% and on options trading from 0.10% to 0.15%, a move that upset the capital markets with the BSE Sensex crashing more than 2,300 points from the day’s high and the NSE Nifty dropping to 24,571.75.
Securities Transaction Tax (STT) is a direct tax imposed on the buying and selling of securities in India.
Commenting on the Budget, Prime Minister Narendra Modi said, “The Union Budget reflects the aspirations of 140 crore Indians. It strengthens the reform journey and charts a clear roadmap for Viksit Bharat.”
February 01, 2026, 14:43 IST
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