Rivian Spins Off Micromobility Business; Aiming for Growth

Rivian Automotive announces a surprise spinoff of its micromobility unit, Also Inc., allowing for a more focused approach on profitability and vehicle production. As Rivian aims to capture the EV market with its R1 and R2 vehicles, investors see this as a strategic shift in operations.

Date: 05-04-2025

AI Rating: 8

Rivian's Strategic Focus on Growth

Rivian Automotive's recent announcement of spinning off its micromobility segment into a new entity, Also Inc., indicates a noteworthy strategic shift aimed at focusing on its core electric vehicle (EV) business. This move follows Rivian's first quarterly gross profit achievement, which is a significant milestone for the company and may impact investor sentiments positively.

The decision to create Also Inc. was largely unexpected, revealing a stealth program that Rivian had been developing over the past few years. Their founder emphasized the importance of focusing on gross profitability to further bolster growth, particularly given Rivian's ambitious plans for its R2 model. This spinoff reflects management's attempt to reduce distractions while aiming for higher production efficiency and effective deployment of resources.

In Q4, Rivian reported a gross profit of $170 million, significantly surpassing analyst expectations and showcasing a 31.9% increase in revenue while successfully reducing the cost of revenue by 18.6%. Such results indicate that Rivian's management is steering the company in the right direction. This progress is especially relevant as Rivian endeavors to increase production capacity with new facilities.

The investments secured for Also Inc. also provide additional financial backing to expand this new business segment. Rivian’s strategic choice to retain a minority stake allows it to keep a foothold without the operational distractions of micromobility. If Rivian can maintain profitability and growth in this redefined focus, investor confidence could strengthen. Therefore, while the stock is still viewed as speculative, the changes indicate potential improvement.

Stocks: RIVN