Electric vehicle (EV) manufacturer Rivian Automotive (NASDAQ:RIVN) is poised to disrupt the new-energy vehicle industry as we know it. Yet, the market doesn’t seem to fully appreciate Rivian’s value to its shareholders. RIVN stock ought to be repriced higher, and this will probably happen soon — and today I’ll give you a strategy to scale into a long position.
Not long ago, Rivian Automotive’s investors learned that the company is narrowing its earnings deficit. That’s great news, and short-term stock traders evidently haven’t paid much attention to Rivian’s financial improvement. Furthermore, as we’ll see, the company is making the right moves to expand its production capacity and make the Rivian driving experience as convenient as possible.
Rivian Automotive’s Brilliant Strategy
Rivian Automotive certainly doesn’t have the clout of Tesla (NASDAQ:TSLA). Yet, I believe that both companies can co-exist in the EV space. Rivian Automotive’s vehicles are sleek, luxurious and powerful, and they should appeal to a niche segment of high-end EV buyers.
At the same time, Rivian is indirectly working with Tesla. By that, I mean Rivian Automotive has adopted Tesla’s charging standard. This is a brilliant move, as it will provide Rivian’s drivers with access to a vast U.S. fast-charging network.
Also on that topic, Rivian’s R1T and R1S models are compatible with EVgo’s (NASDAQ:EVGO) Autocharge+ fast-charging system. Between this charging network and Tesla’s, Rivian’s drivers will have plenty of locations in the U.S. to fast-charge their EVs.
I’m surprised that more automakers aren’t quickly jumping on this bandwagon. Rivian Automotive’s management is effectively future-proofing the company by working with Tesla and EVgo. It wouldn’t surprise me if Rivian’s rivals eventually follow the company’s footsteps and announce that they’re joining the Autocharge+ network, as well.
What the RIVN Stock Sellers Are Missing Out On
Another thing that Rivian Automotive’s skeptics and short-sellers don’t seem to fully appreciate is CEO R.J. Scaringe’s unique vision. Scaringe reminds me of Tesla CEO Elon Musk, as he’s completely unafraid to rock the boat in the EV industry.
Scaringe’s vision will be fulfilled in 2026, as that’s when Rivian Automotive’s Georgia-based EV production plant is expected to start manufacturing vehicles. Not long ago, Georgia’s Supreme Court cleared the way for Rivian to move this manufacturing facility toward eventual production.
Truly, Scaringe takes an off-the-beaten-path approach to producing new-energy vehicles. For instance, the CEO revealed that Rivian Automotive will not use natural gas for heating in the Georgia production plant.
“Things that have typically been done with natural gas — ovens and paint and some of the curing processes — we’re moving to electric processes,” Scaringe clarified. Will Rivian Automotive’s competitors make similar moves in the future? It wouldn’t surprise me at all, but by then, Scaringe and Rivian will probably already be working on other new, exciting innovations.
Use Limit Orders to Buy RIVN Stock
Ready to take a share position in Rivian Automotive? Here’s a strategy you can use: set buy-limit orders to purchase RIVN stock below $20 at several price points.
For example, you could place orders to buy some Rivian shares at $18, and then some more shares at $15, and finally, a few more shares at $12. That’s just an example, and you would want to choose buy levels that you’re comfortable with.
The market doesn’t recognize this yet, but RIVN stock under $20 is an offer you can’t refuse. Still, there are always risks involved with EV startups. So, scale into your Rivian share position with limit orders, and remember that patience is the key to successful investing in the long run.
On the date of publication, David Moadel did not have (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.
