Rivian’s (NASDAQ: RIVN) decision to shelf a joint venture to develop electric vans is a “head-scratcher,” one analyst said, as the two companies signed a Memorandum of Understanding (MOU) just three months ago.
This morning, Rivian announced its plans to “no longer pursue” the MOU it signed with Germany’s Mercedes-Benz to build EV vans. Citing its decision to prioritize near-term goals through a focus on its consumer and already-established commercial market, Rivian said pausing the plans would hopefully culminate in future collaboration.
“As we evaluate growth opportunities, we pursue the best risk-adjusted returns on our capital investments. At this point in time, we believe focusing on our consumer business, as well as our existing commercial business, represent the most attractive near-term opportunities to maximize value for Rivian,” CEO RJ Scaringe said in a statement.
Rivian signed the MOU with Mercedes-Benz in September.
However, analysts are baffled by the decision. Wedbush’s Dan Ives said the only-three-month-old joint venture already being shelved is on par for 2022, but the decision was still a “head-scratcher.”
“This is a complete head-scratcher that Rivian scraps the deal three months after a major announcement,” Ives told Teslarati in a statement. “Never seen anything like this, but then again, it’s a twilight zone in 2022, so nothing is off the table.”
Ives holds a $37 price target on Rivian and maintains a ‘Buy’ rating on the stock. He once said the automaker was undoubtedly a “long-term winner,” but the company needed to “stop the excuses” for not delivering units to customers. Since then, Rivian has ramped production to more acceptable levels. In Q3, it produced 7,363 and delivered 6,584 vehicles.
The length of the Rivian – Mercedes-Benz partnership is intriguing. In a single quarter, Rivian has gone from committing to an MOU to scrapping the joint venture plans for the near term.
In Q3, the automaker reported $536 million in revenues, while analysts expected $551.6 million. The company did report a smaller loss per share than expected at $1.57. Analysts expected a loss of $1.82 per share. The automaker said it was confident its $13.8 billion in cash on hand, which was down from $15.5 billion at the end of Q2, would last the company through 2025.
Automotive startups have felt incredible pressure through the past few years due to supply chain bottlenecks and other consequences due to the COVID-19 pandemic. Rivian, along with other companies attempting to ramp production during the last few years, has experienced financial strain and incredible challenges due to the market. The automaker said it would focus on its consumer and commercial markets before exploring additional opportunities.
Disclosure: Joey Klender is not a RIVN Shareholder.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
Elon Musk
Tesla analyst: ‘near zero chance’ Elon Musk’s $1T comp package is rejected
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
A Tesla analyst says there is “zero chance” that CEO Elon Musk’s new compensation package is rejected, a testament to the loyalty and belief many shareholders and investors have in the frontman.
Tesla investors will vote on November 6 at the annual Shareholder Meeting to approve a new compensation package for Musk, revealed by the company’s Board of Directors earlier this month.
The package, if approved, would give Musk the opportunity to earn $1 trillion in stock, an ownership concentration of over 27 percent (a major request of Musk’s), and a solidified future at the company.
The Tesla Community on X, the social media platform Musk bought in 2023, is overwhelmingly in favor of the pay package, though a handful of skeptics remain.
Nevertheless, the big pulls of this vote are held by proxy firms and other large-scale investors. Two of them, Institutional Shareholder Services (ISS) and Glass Lewis, said they would be voting against Musk’s proposed compensation plan.
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
Today, the State Board of Administration of Florida (SBA) said it would vote in favor of Musk’s newly-proposed pay day, making it the first large-scale shareholder to announce it would support the CEO’s pay.
One analyst said that Musk’s payday is inevitable. Gary Black of the Future Fund said today there is a “near-zero chance” that shareholders will allow Musk’s pay package to be rejected:
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
He added an alternative perspective from Wedbush’s Dan Ives, who said that he had a better chance of starting for the New York Yankees than the comp package not being approved.
There is a near zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting. As Wedbush analyst Dan Ives (@divestech) colorfully put it in a Yahoo Finance interview on October 23rd: “I have a better chance of starting for…
— Gary Black (@garyblack00) October 27, 2025
Black’s the Future Fund sold its Tesla holdings earlier this year. He explained that the firm believed the company’s valuation was too disconnected from fundamentals, citing the P/E ratio of 188x and declining earnings estimates.
The firm maintained its $310 price target, and shares were trading at $356.90 that day.
Shares closed at $452.42 today.
The latest predictions from betting platform Kalshi have shown Musk’s comp package has a 94 percent chance of being approved:
— Kalshi (@Kalshi) October 20, 2025
Tesla analysts are expecting big things from the stock (NASDAQ: TSLA) after many firms made price target adjustments following the Q3 Earnings Call.
Last Wednesday, Tesla reported earnings with record revenue but missed EPS estimates.
It blew delivery expectations out of the water with its strongest quarter in company history, but Tesla’s future relies on the development of autonomous vehicles, robotics, and AI, which many bullish firms highlight as major strengths.
The earnings call reiterated those points, along with the belief that Tesla CEO Elon Musk should be rewarded with a newly proposed pay package that would enable him to gain $1 trillion in wealth if he comes through on a lengthy list of performance tranches.
Nine Wall Street firms made adjustments to their outlook on Tesla shares in the form of price target increases since last Wednesday’s call, all of which are indications of big expectations for the stock moving forward.
Here are the nine firms that made moves:
- Truist – $280 to $406, reiterated Hold rating
- Roth MKM – $395 to $404, reiterated Buy rating
- Cantor Fitzgerald – $355 to $510, reiterated Overweight rating
- Deutsche Bank – $435 to $440, reiterated Buy rating
- Mizhuo – $450 to $485, reiterated Outperform rating
- New Street Research – $465 to $520, reiterated Buy rating
- Evercore ISI – $235 to $300, reiterated In Line rating
- Freedom Capital Markets – $338 to $406, upgraded to Hold rating
- China Renaissance – $349 to $380, reiterated Hold rating
The boosts in price target are largely due to Tesla’s future projects, as Roth MKM, Cantor Fitzgerald, Mizuho, New Street Research, and Evercore ISI all explicitly mention Tesla’s autonomy, robotics, and AI potential as the main factors for its price target boosts.
Cantor Fitzgerald raises Tesla PT To $510, citing Cybercab, Semi, and AI momentum
It is no surprise that many firms are adjusting their outlook on Tesla shares considerably in an effort to prepare for the company’s transition to even more of a tech company than a car company.
The issue with many analysts is that they treat the company’s vehicle deliveries as the main indicator of value.
However, Tesla has a robust energy division, which was a major contributor to the company’s strong margins and gross profit in Q3, as well as its prowess in robotics and AI.
Additionally, the company is seen as a key player in the autonomy field, especially after launching driverless rides on a Robotaxi platform in Austin and expanding a similar program in the Bay Area.
Tesla shares were up over 5 percent at 12:18 p.m. on the East Coast.
Tesla preps for a harsh potential reality if Musk comp vote doesn’t go to plan
Tesla Full Self Driving (FSD) is nearing approval in a new country
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
-
Elon Musk2 weeks agoSpaceX posts Starship booster feat that’s so nutty, it doesn’t even look real
-
Elon Musk2 weeks agoTesla Full Self-Driving gets an offer to be insured for ‘almost free’
-
News2 weeks agoElon Musk confirms Tesla FSD V14.2 will see widespread rollout
-
News2 weeks agoTesla is adding an interesting feature to its centerscreen in a coming update
-
News2 weeks agoTesla launches new interior option for Model Y
-
News2 weeks agoTesla widens rollout of new Full Self-Driving suite to more owners
-
Elon Musk2 weeks agoTesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
-
News1 week agoTesla might be doing away with a long-included feature with its vehicles