Rivian (RIVN) stock surged 19.8% this week, overshadowing Tesla (TSLA) which only gained 1.5%. Rivian’s Q4 earnings showed $120M gross profit and $7,200 per-vehicle cost improvement, with software revenue up 109% to $447M from the Volkswagen joint venture.

The R2 SUV by Rivian will launch in Q2 2026, competing directly with Tesla’s Model Y. The company expects to deliver 62,000-67,000 units in 2026. Rivian’s software revenue now makes up over one-third of total revenue.

Rivian’s Q4 earnings beat estimates with $1.29B in revenue, though automotive revenue dropped 45% YoY due to a $270M decrease in regulatory credit sales and demand decline after the federal EV tax credit expiration.

The R2 SUV, set for Q2 2026 deliveries, aims to capitalize on the growing EV market. Rivian’s 2026 guidance projects 62,000-67,000 deliveries, marking a significant increase from 2025. Software revenue growth continues to reshape Rivian’s business model.

Rivian’s software and services revenue spiked 109% YoY to $447M in Q4, primarily driven by the Volkswagen joint venture. Software now accounts for over a third of total revenue, offering higher margins than vehicle manufacturing. This shift could redefine Rivian as a technology platform.

Rivian’s 19.8% stock surge indicates investor optimism in the company’s long-term prospects. Despite near-term challenges, positive unit economics, R2’s imminent launch, and a growing software business are key factors. Profitability remains a goal, with an expected adjusted EBITDA of negative $2.1B to $1.8B in 2026.

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Read more at Yahoo Finance: The Week in EV Stocks: Rivian Gains 19.8% While Tesla Lags Behind