Rivian's $1.25 Billion Uber Robotaxi Deal Looks Like A Big Win—But Some Analysts Say It's Actually A High-Stakes 'Test'

Rivian Automotive Inc. (NASDAQ:RIVN) on Thursday announced a deal with Uber Technologies Inc. (NYSE:UBER) wherein the latter will invest up to $1.25 billion in the company through 2031, contingent on achieving specific autonomous milestones. What's The Deal? As part of the deal, Rivian will provide up to 50,000 R2-based robotaxis. Uber has committed on an initial investment of $300 million and the initial order covers 10,000 robotaxis, with an option for Uber to purchase up to 40,000 additional robotaxis. Rivian has to hit four performance milestones to secure the complete funding from Uber. Analyst Says Deal Validates Rivian BNP Paribas Equity Research senior analyst and head of US auto research, James Picariello, in a note, said that the deal shows Uber's confidence in Rivian's autonomy capabilities. Picariello, in a note, said, "This further supports RIVN's decision to develop autonomy in-house, while confirming that it expects to reach commercially viable level 4 capabilities by 2028." But Not Everyone Agrees While some have called the deal a positive for Rivian, not everyone agrees. EMJCapital's founder, Eric Jackson, in a post on X called this a test for Rivian. "Rivian's $1.25B Uber deal looks like validation. It's actually a test," Jackson said in his post. Jackson highlighted that Uber has signed deals with several companies, including Alphabet Inc's (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo, Lucid Group Inc. (NASDAQ:LCID), Nuro, Nvidia Corp. (NASDAQ:NVDA) and more. Uber's deal with Rivian is an "option" for the ride-hailing giant, while Rivian is going "all-in" for the deal. Rivian has confirmed that due to an increase in its R&D costs, it no longer expects to deliver positive EBITDA in 2027. "Rivian just pushed out profitability and increased burn," Jackson added. Gary Black Says Rivian Will Be Acquired The Future Fund's Gary Black, in a post on X, said that he believes that Google, Amazon.com Inc. (NASDAQ:AMZN), or one of the Big 3, will "ultimately acquire" Rivian to boost their presence in the EV industry and gain full autonomy. He called this one of the reasons to own RIVN stock. Check out more of Benzinga's Future Of Mobility coverage by following this link. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Michael Berlfein via Shutterstock