Investors following the electric vehicle (EV) sector have high hopes for long-term success Rivian Automotive (RIVN 2.92%). No one expected that it would be easy to follow a similar path he paved. Tesla’sRivian has some unique aspects that give it a decent chance.

However, there were various obstacles on his way to success that prevented him from advancing further on the path to profitability. Rivian’s shares have paid the price, falling nearly 57% so far this year. However, the company has prepared itself for a comeback. The upcoming quarterly report may give investors reasons to believe the trend is upward. Let’s see what might come when management provides this update on November 7th.

Rivian’s early cash crunch

Rivian had aggressive plans from the beginning. It announced plans to invest $5 billion to build a second production facility in late 2021. Consider that Rivian produced only 1,015 EVs that year and delivered just 920. Its brand was well received and it successfully increased its volume, delivering just over 50,000 units. two years later.

However, this volume increase was more costly than expected. Input material costs were high and supply chain constraints increased expenses, while demand growth for electric vehicles began to slow. The company reacted by quickly stepping back capital expenditure plansThis includes postponing plans to develop a second production facility.

Rivian has raised nearly $3 billion, including $1.5 billion in 2023 alone bond issue last October. But despite raising money during this period, Rivian’s cash position has decreased significantly over the past three years.

RIVN Cash and Equivalents (Quarterly) data YCharts.

But as of June 30, Rivian still had $7.9 billion in cash and equivalents on hand. 1 billion dollars to this convertible note given for Volkswagen Group. This is part of the global automaker’s overall $5 billion investment in Rivian. Companies are also making plans a technology joint venture (JV) as part of the agreement.

What can November 7 bring?

There are three things Rivian management can focus on with its upcoming third quarter update. However, the company’s confident statement that it now has enough capital to get through the production and development stages of its next-generation R2 SUV could be a major catalyst for the stock. The R2 platform will be followed by R3 and R3X, planned for 2027. But Rivian will also gain sales from the R2 launch in 2026 if it has the capital to reach 2027 while also investing in future growth.

The company’s cash flow is critical and confidence in this situation is likely to boost shares after November 7. At the same time, what management says about 2025 production expectations will also play a role in how investors react. Rivian doesn’t expect to produce more in 2024 than it did in 2023. Part of this is due to a retooling of the Illinois factory in preparation for the start of R2 production next year. The increase in production plans will also give investors a reason to bid the stock higher.

The third issue to watch is the debate regarding ongoing cost reductions. Higher production and delivery volumes will not help the company or its stock if it is not recording profitable sales. Rivian’s Nov. 7 report could be a turning point for the company and its stock.

The risk of not providing the information investors want to hear remains high. So an investment before the third quarter report still needs to be at an appropriate allocation given this risk. If all goes well, the stock could currently be in a bottom range with plenty of upside potential.