Stock Market

RIVN Stock: Rivian Just Got $827 Million to Expand Its Illinois Plant

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Rivian Automotive (NASDAQ:RIVN) stock is rising today on important production news. It hasn’t been an easy month for the electric vehicle (EV) producer, but things are starting to look up. Specifically, today brought news that the state of Illinois has offered Rivian an $827 million incentive package to expand its factory in Normal, Illinois, sending RIVN stock into the green.

As this facility is where the company builds its popular R1S and R1T models, this cash influx is of paramount importance. It should allow Rivian to keep scaling production at a critical time when the company needs to show investors it’s still worth betting on.

With Rivian’s next earnings report approaching, RIVN stock is in full focus on Wall Street. But now investors have another reason to trust that its recent growth can continue throughout the second half of 2024. Like most of the EV market, Rivian is mounting a comeback.

What’s Happening With RIVN Stock?

It’s not hard to see why this news would quickly boost share prices. As of this writing, RIVN stock is up more than 1% and looks primed to keep trending upward. After spending the past few days gradually picking up momentum, RIVN is likely to close the week out on a high note.

The company also has a powerful new ally in Illinois Governor J.B. Pritzker. A Democrat, Pritzker has made it clear that he believes in the power of EVs to help transform Illinois’ economy. This is in stark contrast to the trend of Republican leaders who have displayed a clear anti-EV stance. Pritzker said the following amid the incentive package announcement:

“Illinois is positioned to be a powerhouse in this market for years to come, bringing quality jobs and revitalizing communities across the state […] I want to thank our partners at Rivian, who have doubled down on their investment in Illinois. Together, we’re taking a tremendous step forward – for our electric vehicle ecosystem, for our economy, and for our state. Each and every dollar invested in this market is a win for the working people of Illinois and brings us a step closer to meeting our ambitious climate goals.”

Electrek reports that Rivian will put its new cash toward three key areas: Expanding manufacturing operations, building out public infrastructure and training new staff. This makes sense, as the company is currently working hard to reverse the losses it suffered over previous quarters amid volatile market conditions. With Illinois stepping up to help Rivian keep scaling production, that goal looks much more achievable.

Why It Matters

Despite its recent success, Wall Street sentiment toward RIVN stock remains mixed. Over the past few weeks, many firms — including Truist Financial — have either reduced their price targets or reiterated bearish ratings. Earlier this week, Rivian announced plans to open up its EV charging fleet to other EV drivers, but even in the face of good news, many experts are skeptical. Rivian currently has a moderate buy consensus rating among analysts, with 12 buy ratings, eight holds and three sells.

Still, the Illinois investment should show investors that Rivian is on track to continue production and expand its capacity. If these trends continue, RIVN stock will be in an excellent position to keep making up lost ground.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.

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