Rivian Cuts Costs By 35%: What's Going On With Rivian's Stock?

Rivian Automotive, Inc. RIVN shares traded higher Monday following a report suggesting the company has simplified its output and cut costs.

The Details:

Rivian's CEO RJ Scaringe told Reuters the company has removed more than 100 steps from the battery-making process, 52 pieces of equipment from the body shop and over 500 parts from the design of its EVs., resulting in a 35% reduction in cost of materials. 

The redesigned battery packs now come in one piece, instead of walls and floors that were built separately. Vehicles have been redesigned to reduce weight and improve efficiency, with 1.6 miles of wiring removed from each vehicle.

Tim Fallon, Rivian's vice president of manufacturing, told Reuters the cumulative effect of the redesigns have reduced vehicle production costs and improved manufacturing efficiency. 

“All of that together leads to us being able to get to our path to profitability and be gross-margin positive,” said Fallon. 

According to data from Benzinga Pro, Rivian shares are trading above the stock’s 50-day moving average of $10.18 and 18.58% of available shares are being sold short.

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Should I Sell My RIVN Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Rivian Automotive have lost 17.39% year to date. This compares to an average annual return of -53.21%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Rivian Automotive stock currently has an RSI of 8.1, indicating oversold conditions.

For analysis tools, charting data and access to exclusive stock news, check out Benzinga PRO. Try it for free.

RIVN Price Action: According to Benzinga Pro, Rivian Automotive shares closed 6.6% higher at $11.01 on Monday.

Image: Courtesy of Rivian Automotive, Inc.