Is It Time to Buy Rivian After Uber Partnership?

Rivian Automotive (NASDAQ: RIVN) added to its awesome database of partnerships erstwhile it precocious struck a woody with ride-share person Uber Technologies (NYSE: UBER). The woody volition assistance the electrical conveyance (EV) shaper money its autonomous driving ambitions.

Under the agreement, Uber volition put up to $1.25 cardinal successful Rivian, including $300 cardinal instantly aft the woody clears regulatory approval. As portion of the agreement, Uber volition bargain 10,000 autonomous versions of Rivian's R2 vehicles with an enactment to acquisition 40,000 much starting successful 2030. The R2 robotaxis volition beryllium disposable exclusively done Uber and are expected to beryllium disposable successful San Francisco and Miami successful 2028.

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Rivian is inactive presently processing its autonomous driving capabilities and expects to person hands-free navigation akin to Tesla's FSD supervised exertion by the extremity of the year. It present looks similar it plans to scope afloat autonomous level 4 driving by 2028, fixed the deal's timeline.

For the R2, the institution volition usage a customized spot called the Rivian Autonomy Processor (RAP1), and it volition yet adhd a lidar sensor to spell on with cameras and radar. As such, it is going aft autonomy with a much sensor-rich stack similar Alphabet's Waymo, arsenic compared to Tesla, which has been taking a vision-first attack and not utilizing lidar.

The statement follows Rivian's penchant for striking partnerships with starring companies. Amazon became a large stakeholder successful the institution backmost successful 2019, aft it chose Rivian to beryllium its electrical transportation van provider.

Meanwhile, Rivian formed adjacent ties with Volkswagen backmost successful 2024, arsenic the German automaker agreed to put up to $5.8 cardinal successful Rivian. The 2 companies besides formed a associated task that gave Volkswagen entree to Rivian's important zonal electrical architecture that tin importantly trim the costs of EVs.

Rivian's bundle concern has been a fast-growing, high-margin portion of its concern that has helped the institution execute affirmative gross margins. Now the institution is truly looking to displacement this portion of its concern into overdrive by going aft afloat autonomous driving and robotaxis successful the adjacent fewer years. I wouldn't beryllium amazed if the institution really has a late-mover vantage with this arsenic it learns from Waymo's and particularly Tesla's mistakes.