It’s been a wild ride for investors in Rivian Automotive (NASDAQ: RIVN) and Nio (NYSE: NIO), filled with ups and downs. Both companies have previously had solid momentum behind them, and faced headwinds, setbacks, or disruptions. Both also still have much to prove to investors.
One analyst recently cast doubt on Rivian’s gross profit, and Nio will need to show that it can offset the effects of China’s brutal price war. Let’s dive into both electric vehicle (EV) makers below and see what may lay ahead for them.
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One of the biggest takeaways from Rivian’s fourth quarter was that it achieved $170 million in gross profit, which is simply total revenue minus the cost of revenue. It was a sizable win compared to analysts’ estimates of $49 million in gross profit and was the company’s first quarterly gross profit in its short history.
While the company certainly made progress — Rivian’s cost of revenue dropped 18.6% while revenue spiked 31.9% higher — there was a small drawback. That came in the form of sharply higher sales of regulatory credits, which added $299 million in revenue during the fourth quarter. Regulatory credits are awarded to automakers that produce and sell electric vehicles, and the excess can be sold to other automakers that need the credits to meet emissions standards.
Rivian expects sales of regulatory credits to be similar for 2025 and guided for a positive gross profit for the full-year. Doing so would be a big step toward proving to investors that it has a path to profitability.
At least one analyst disagrees with Rivian’s management. Bernstein’s Daniel Roeska warned that the company may fail to reach that goal until 2027.
It’s true that Rivian will face challenges. Its delivery growth has stalled, so much of the automaker’s gross profit improvement will come from a reduction in revenue costs. The company lacks a revenue catalyst, with the R2 not set to hit the roads until the first half of 2026.
Gross profit will be something that analysts and investors both focus on throughout 2025, and it would go a long way if Rivian could achieve its full-year positive gross profit.
Meanwhile, Nio is expected to see strong momentum throughout 2025, driven by two new brands, Onvo and Firefly. In fact, during Q4, the company’s deliveries broke down to 52,760 from its premium Nio brand and 19,929 from its Onvo brand. As deliveries of both Onvo and Firefly accelerate it is expected to drive strong revenue and delivery growth, but that didn’t materialize quite as expected during Q4 with Firefly only having just launched.
