Rivian’s (RIVN) upcoming R2 launch — with deliveries planned for mid-2026 — could be a game-changer for the EV maker, giving a boost to the company’s brand, product demand, and by extension its stock price which has cratered since its November 2021 IPO.
“2026 is the year of the R2,” says Baird analyst Ben Kallo, and with fears over the expiration of EV tax credits in the rearview mirror, “we believe investors will be more willing to begin work on RIVN as it enters a new product cycle with the R2.”
This leads Kallo to upgrade Rivian (RIVN) to Outperform with a Speculative Risk qualifier from his earlier Neutral rating, with a 78% hike in his target price to a street high of $25. This assumes 42% upside to Wednesday’s closing price.
Besides the R2, Kallo also anticipates more fleet partnerships for the RCN besides Amazon (AMZN) with the company’s liquidity position (including $6.6B available through a Department of Energy loan) sufficient to fund any additional expansion plans beyond the Georgia manufacturing facility.
“As Rivian ships its first vehicles, the company is ambitiously tackling two markets simultaneously, consumer and commercial,” Kallo adds.
Shares are getting a boost from Baird’s upgrade as well as new features and updates for its R1 SUVs. The update to the “Universal Hands Free” software now allows drivers to take their hands off the wheel on more than 3.5 million miles of roads where there are visible lane lines, up from the prior capability on 135,000 miles of road.
Other new features include the ability to choose a “drive style,” that is either “mild,” “medium,” or “spicy” which adjusts the gap distance steering speed during lane changes.
Rivian (RIVN) also provides owners with a digital key that can be integrated to a digital wallet and smartphone device, along with a customizable driver display.
The upgrade and new product news is driving Rivian (RIVN) shares higher, currently up 6%.