Few companies have survived the boom and bust of the electric vehicle sector over the past five years. Libian Automotive (rivn 4.31%)) It’s still kicking. With Teslait is one of the only pure electric vehicle (EV) companies that produce cars for customers as competition intensifies and industry growth calms down.
The company is still in its very early stages, but there are big plans for its product pipeline and investment over the next few years. At the time of writing, the stock is trading for less than $15, exceeding 90% of the all-time high that returned to the initial public offering. With such discounts, is it time to invest in EV Disrupter Rivian Automotive? Let’s dig deeper into first quarter revenue and look further.
Drop-down streaming guidance
Deliveries to Libian customers hit a wall as EVs were slow to crawl in 2025. That R1 truck costs $70,000 to $100,000 for an individual to buy, which is too expensive for most shoppers in the US. Deliveries were just 8,640 in the last quarter. This is just a small portion of the delivery of industry leaders such as Tesla. The numbers are moving in the wrong direction, with over 13,000 people delivered in the first quarter a year ago.
However, Libian is making progress to improve the unit’s economy and free cash burns. That total margin reached 17% in the company’s record in the first quarter. This comes as revenue growth from software and services increased to $318 million compared to $88 million the previous year. Volkswagen. Free cash flow over the past 12 months was minus $1.8 billion, with improvements from several years ago.
With $7 billion in cash on the balance sheet and billions of dollars in promises from partners like Volkswagen to the US government, Libyan Automotive has been around for years to try to reach positive free cash flow. To do so, you will need to start growing your delivery again to get scaling. How do you plan that? Uses cheaper EV models.
People who charge electric cars. Image source: Getty Images.
Future R2 vehicles
The R2 is an SUV that Libian is scheduled to release in 2026, and production at the factory is currently being built. The cost ranges from around $45,000 to $50,000, which significantly reduces the price range compared to the R1. This should open up a market for more people in the US to try out Libyan cars.
Libian is a niche player in the space, but in California, one of the biggest markets for EVs, its bestselling premium SUVs are over $70,000. The brand is strong and the customers are satisfied with the quality of their products. If they can scale up, lower prices and maintain this premium brand for their customers, Libian can accelerate demand for their vehicles after 2026. You need to do so to reach positive cash flow.
RIVN Free Cash Flow Data based on data YCHARTS
Should I buy Libian stocks?
Libian is currently generating exactly $5 billion in annual revenue. If you can expand production and move delivery in the right direction with a cheaper R2, there are plenty of opportunities to make this revenue figure 10 billion, 20 billion, and perhaps even higher in a decade. There are over 1 million EVs sold annually in the US, and they should grow in the long term.
Increases total margins and earn $20 billion in revenue, helping Libian turn his finances around. Now, with a market capitalization of $16 billion, even just $1 billion in a positive free cash flow generation at some point in the near future could help turn the corner of Libian stocks.
The problem is that the company does a lot of work to make this happen. It has not yet been shown that it can move the delivery in the right direction and is making a big bet on the R2 product. The competition comes from legacy auto players who continue to gain share in the US. Larger deliveries need to grow to reach a scale large enough to reverse into positive free cash flow. The total margin for the automotive business is small and you need to obtain sufficient unit volume to cover overhead costs.
Taking all this into consideration, it is difficult to assert why someone should own Libian stocks now. There are many possibilities for this brand, but it has not proven that it can generate positive free cash flow or has a clear path to growing delivery. For now, stay away from Libian stocks even at today’s cheap prices.
Brett Schafer has no position in any of the stocks mentioned. Motley Fools have a job at Tesla and recommend it. Motley’s Fool recommends the Volkswagen AG. Motley Fools have a disclosure policy.
