Rivian looks to AI and autonomy to woo investors as EV sales stagnate

DETROIT — Rivian Automobile will let artificial intelligence take the wheel to try to convince investors that its future can be more lucrative than its past.

The all-electric vehicle maker is set to hold its first “Autonomy and AI Day” on Thursday, as its core business of producing and selling electric vehicles has not been as successful as expected since its 2021 IPO.

The automaker’s shares have fallen more than 80% since then as internal and external challenges have caused sales and production to slow compared to forecasts. The company also continues to lose billions of dollars each year, despite significant cost reductions and software revenue gains from a multi-year, $5.8 billion joint venture deal with German automaker Volkswagen.

CEO RJ Scaringe has consistently sold the company as a tech play in various guises – from the initial touting of its cloud-based technology and “vertically integrated ecosystem” to the more recent emphasis on a new “zonal” software architecture and its AI aspirations.

But the pressure is on for Rivian to keep its promises. The company has tactically integrated its software and automation efforts to unlock future growth potential for investors and to attempt to expand its customer base amid slowing electric vehicle sales and regulatory changes.

“Longer term, we believe what will differentiate Rivian’s autonomous capabilities will be our end-to-end AI-centric approach,” Scaringe said last month during the automaker’s latest quarterly investor call.

Rivian is following the strategy of other “pure EV” automakers in the United States, especially Tesla.

The U.S. electric vehicle leader has been promising owners for more than a decade that its cars can be transformed into autonomous vehicles that can operate for them while they sleep or take a cross-country trip without human intervention. The company launched a pilot robotaxi service in Austin, Texas, this year, with human safety drivers on board, and intends to expand it to new U.S. markets next year.

Fellow EV automaker Lucid also recently partnered with AV startup Nuro to bring driverless features to its electric vehicles.

But Wall Street isn’t completely buying into the hype.

Morgan Stanley this week downgraded Rivian’s rating to underweight, citing the deceleration of electric vehicles and the fact that Rivian did not have the “scale or balance sheet to support the capital intensity” of reinvestment in the current “hype cycle” around AV and AI. He also downgraded Lucid and Tesla for one or both of these reasons.

“We are taking a more cautious view on the auto industry as we approach 2026, after a surprisingly resilient 2025,” Morgan Stanley analyst Andrew Percoco wrote in a note to investors on Sunday.

Scaringe said AI Day would include an in-depth look at the computing power of Rivian’s new vehicles, like its upcoming “R2” SUV; its autonomous vehicle platform; and a data wheel in which data inputs are used to continually improve products.

The hope is to increase confidence in Rivian’s future vehicles and technologies, which Wall Street analysts say could be licensed to other companies.

Rivian is currently seen as lagging behind Tesla and even traditional automakers such as General engines, Ford engine and German luxury brands regarding its advanced driver assistance systems, or ADAS. Its features have recently allowed some drivers to take their hands off the wheel when driving on the highway in certain circumstances, a step that other automakers have already taken.

Rivian AI Day comes more than four years after Tesla became the first automaker to hold such an event. Although Rivian is regularly compared to Tesla, its AI Day is expected to focus more on vehicles and supporting software initiatives rather than non-core businesses such as humanoid robots as Tesla has done.

Wall Street analysts widely expect Rivian to provide more details on the future capabilities of its vehicles on Thursday.

“Management will likely provide updated timelines on its next-generation features and perhaps better scale the cost/resources needed to realize its ambitions,” Edison Yu, an analyst at Deutsche Bank, said in a note to investors. “At a high level, the company has hinted at a vertically integrated, AI-centric autonomy platform that digests raw, multi-modal sensor data to train large models.”

Advanced driver assistance systems and autonomous vehicles have once again become a priority for investors and automakers as AI technologies have developed over the past year.

The automotive industry has been working on creating true AVs for some time now, although it has had little success other than thanks to Google– backed by Waymo and, increasingly, Tesla’s ADAS features. But insiders and experts believe AI can finally unlock the technology’s true potential.

“We believe RIVN will attempt to show why they should be considered serious players in the U.S. AV sector, which is currently largely seen as a two-player game between Tesla and Waymo,” Barclays analyst Dan Levy said in a note to investors Friday.

Wall Street analysts expect Rivian to focus on its internal software enabling more advanced ADAS features, including the ability for its vehicles to eventually be able to drive themselves in certain circumstances.

Scaringe said the company plans to expand the use cases for its hands-free systems to “just about any road” in the near term, followed by eyeless driving in the coming years. He recently expressed support for lidar, or light detection and ranging, which allows vehicles to better sense or “see” their surroundings.

“We applaud Rivian for its pivot on autonomy, especially as we believe Level 3 autonomy will be a critical milestone for all OEMs. [original equipment manufacturers]. Its internalization focus could turn autonomy into a profit center, which is important especially given the company’s liquidity situation,” RBC analyst Tom Narayan said last week.

Rivian’s current vehicles have a suite of radars, cameras and other sensors, but no lidar.

SAE International, formerly known as the Society of Automotive Engineers, has characterized automated driving for vehicles from Level 0 to Level 5. The highest Level 5 is a fully autonomous vehicle, with each step from Level 0 adding more technology and allowing human drivers to be more “out of the loop.”

Vehicles on U.S. roads today have varying levels of autonomy, but almost all are rated at Level 2 – allowing drivers to keep their hands off the wheel in certain circumstances – or lower, including those equipped with cruise control and “adaptive cruise control.”

More recently, many companies have focused on developing their ADAS systems beyond Level 2, where vehicles can largely drive themselves under certain conditions.

Industry experts have also raised questions about the demand for AV technology. General engines was the first to offer hands-free driving technologies in 2017, but the rollout was slow and adoption was low after free trials ended.

Even at Tesla, which is considered a software and technology leader in the United States with “tech-savvy” buyers, only about 12 percent of customers paid for its high-end “FSD” system, which can control the vehicle in many circumstances, the company said recently.

Despite Rivian’s third-quarter sales falling 14% and the company’s downward revision of forecasts, Rivian shares have risen more than 30% this year amid operating profit gains and investor optimism.

This optimism is due to the company’s new technology rollout and the upcoming launch of its new R2 vehicle in the first half of next year.

But given that these are both forward-looking catalysts, Wall Street analysts expect that much of the upside potential is already priced into the company’s stock price.

“We think investors are less likely to be optimistic about RIVN catching up to Waymo/Tesla in AV, and we expect test drives/an impressive tech stack to be less likely to move the stock (this is arguably already priced into the stock),” Levy said.

Shares of Rivian closed Tuesday at $17.71, up 0.1% ahead of the AI ​​event. The stock is up 33% this year, but that’s a far cry from the company’s $78 per share IPO.

—CNBC Lora Kolodny And Michael Bloom contributed to this report.