By Michael Elkins 

Morgan Stanley reiterated an Chubby score and $26.00 worth goal on Rivian (NASDAQ:) because the automaker targets 50k items of manufacturing in 2023. When Tesla (NASDAQ:) crossed the 50k unit milestone in 2015, it earned a optimistic 21.3% gross margin. Nevertheless, analysts estimate a unfavourable 68% gross margin for Rivian.

Morgan Stanley spoke with administration final week to debate a few of the distinctive circumstances to think about when evaluating Rivian’s present working metrics to that of Tesla again in 2015 when it crossed the 50k threshold.

Rivian’s 50k items this 12 months are unfold throughout two totally different manufacturing strains at their Regular plant that’s designed for a considerably larger scale of manufacturing capability (150k items). This contributes to a few of the inefficiency in RIVN numbers relative to TSLA in 2015. There have additionally been quite a lot of variable value headwinds that Rivian faces, such because the lithium spot worth, which was lower than $8k/ton in 2015 in comparison with over $50k in the present day.

Individually, Morgan Stanley distributed a survey to institutional traders and business specialists. Outcomes confirmed that 43% of respondents imagine Rivian ought to pursue a extra offensive strategy to commercialize R2 ASAP, whereas 39% of responses really helpful Rivian pursue strategic options. When requested to check Rivian to rival corporations like Tesla and Lucid (NASDAQ:), a considerable majority (79%) of respondents imagine Tesla would be the greatest performer by means of year-end.

Shares of RIVN and TSLA are up 1.02% and 1.05% respectively in pre-market buying and selling on Tuesday.