Rivian is turning to artificial intelligence and autonomy to attract investors as electric vehicle sales stall

DETROIT — Rivian Cars It will allow AI to take the lead in trying to convince investors that its future can be more profitable than its past.

The all-electric car maker is set to host its first “Autonomy and AI Day” on Thursday, as its core business of producing and selling electric vehicles has not been as fruitful as expected since its 2021 initial public offering.

The automaker’s shares have fallen more than 80% since then, as internal and external challenges caused sales and production to lag behind planned. The company also continues to lose billions of dollars annually, despite significant cost cuts and gains in software revenue thanks to a multi-year, $5.8 billion joint venture deal with German automaker Volkswagen.

CEO RJ Scaringe has always sold the company as a technology play in various forms — from initially touting cloud-based technology and a “vertically integrated ecosystem” to recently highlighting its new “logical” software architecture and AI aspirations.

But the pressure is on for Rivian to succeed. It has tactically brought its software and automation efforts onshore to unlock future growth potential for investors and try to expand its customer base amid slowing electric vehicle sales and regulatory changes.

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

Rivian is following the “pure electric vehicle” strategy of other automakers in the US, specifically Tesla.

The US electric car company has been promising owners for more than a decade that its cars would be able to upgrade to self-driving vehicles that could operate for them while they slept or took 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 that to new US markets next year.

Fellow EV automaker clear It also recently partnered with AV startup Nuro to bring self-driving features to its electric vehicles.

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

Morgan Stanley this week downgraded Rivian to underweight, citing a slowdown in electric vehicles and Rivian not having the “scale or balance sheet to support the capital intensity” to reinvest in the current “industry hype cycle” around self-driving vehicles and artificial intelligence. It also downgraded Lucid and Tesla for one or both of these reasons.

“We are taking a more cautious view on the auto industry heading into 2026 after a surprisingly resilient 2025,” Andrew Percoco, an analyst at Morgan Stanley, wrote in an investment note on Sunday.

Scaringe said AI Day will include an in-depth look at the computing power of new Rivian vehicles, such as its upcoming R2 SUV; autonomous vehicle platform; and a data flywheel where data inputs are used to continuously improve products.

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

Rivian is currently seen as lagging behind Tesla and even legacy automakers like GM, ford motor and luxury German brands when it comes to advanced driver assistance systems, or ADAS. Its features have only recently allowed some drivers to take their hands off the wheel while driving on highways under certain conditions, a major feat that other automakers have already reached.

Rivian AI Day comes more than four years after Tesla became the first automaker to host such an event. While 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 like humanoid robots like Tesla.

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

“Management is likely to provide updated timelines for next-generation features and perhaps better dimensions of the cost/resources required to achieve its ambitions,” Deutsche Bank analyst Edison Yu said in a note to investors. “At a high level, the company has hinted at a vertically integrated, AI-centric autonomy platform that ingests raw, multi-modal sensor data to train large models.”

Advanced driver assistance systems and autonomous vehicles have once again become the focus of investors and car companies as artificial intelligence technologies have grown over the past year.

The auto industry has been working on true self-driving vehicles for some time, although with little success Google-Waymo supported and, increasingly, Tesla’s ADAS features. But insiders and experts believe AI can finally unleash the technology’s true potential.

“We believe RIVN will try to show why they should be seen as a serious player in the U.S. autonomous vehicle space, which is currently largely viewed as a two-man play between Tesla and Waymo,” Barclays analyst Dan Levy said in an investment note on Friday.

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

Scaringe said the company expects to expand use cases for its hands-free systems to “almost any road” in the short term, followed by hands-free driving in the coming years. He recently expressed support for lidar, or light detection and ranging, systems that allow vehicles to better detect or “see” their surroundings.

“We applaud Rivian for its pivot to autonomy, especially given our view that Level 3 autonomy will be a critical step for all OEMs.” [original equipment manufacturers]. “Its goal of insourcing could make Autonomy a profit center, which is especially important given the company’s liquidity position,” RBC analyst Tom Narayan said in a note last week.

Current Rivian vehicles feature an array of radars, cameras and other sensors but not a lidar sensor.

SAE International, formerly known as the Society of Automotive Engineers, has distinguished automated driving for vehicles from Level 0 to Level 5. The highest level, Level 5, is a fully autonomous vehicle, with each stage 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 as Level 2 — allowing drivers to take their hands off the steering wheel in certain circumstances — or lower, including those with cruise control and “adaptive cruise control.”

Recently, several companies have focused on developing their advanced driver assistance systems beyond Level 2, where vehicles can largely drive themselves under certain conditions.

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

Even at Tesla, which is seen as a software and technology leader in the United States with “tech-savvy” buyers, only about 12% of customers have paid for its advanced FSD system that can control the car in a variety of conditions, the company said recently.

Despite a 14% decline in Rivian sales during the third quarter and revisions to the company’s downward guidance, Rivian shares have risen more than 30% this year amid gains in operating profit and investor optimism.

This upward trend is led by the company’s new technology offering and the expected launch of its new car, “R2”, during the first half of next year.

But given that these two catalysts look to the future, Wall Street analysts expect a lot of upside potential to already be priced into the company’s stock price.

“We think investors are less inclined to be optimistic about the case for RIVN catching up with Waymo/Tesla in AV, and we expect the test drives/nice tech stack to be less likely to move the stock (with the potential for this to actually be built into the stock),” Levy said.

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

– CNBC Laura Kolodny and Michael Bloom She contributed to this report.