Two analysts had polarizing reactions about electric vehicle (EV) startup Rivian Automotive Inc RIVN following its investor day and up to $5 billion joint venture with Volkswagen.

The Rivian Analysts: The following analysts posted notes on Rivian on June 27 and June 28.

• Piper Sandler analyst Alexander Potter reiterated an Overweight rating, maintaining a $21 price target.
• D.A. Davidson analyst Michael Shlisky reiterated a Neutral rating, raising the price target from $12 to $13.

Piper Sandler on Rivian: Potter is bullish on Rivian on the back of its partnership with Volkswagen.

We still view the recently-announced JV with Volkswagen as a game-changer, and not just because VWs scale should help Rivian achieve lower COGS [cost of goods sold], said the analyst. Even more importantly, we think the JV validates Rivians decision to design its own electrical architecture. Its not outwardly apparent to the average consumer, but in-house electronics represent a fundamental advantage for companies like Rivian and Tesla.

D.A. Davidson on Rivian: Shlisky was a bit more skeptical following the event, noting a considerable amount of mystery regarding the partnership.

What we did glean from our discussions with management during lunch is that the second $1B RIVN will receive (following the $1B convert that funded this week) will not be dilutive; rather, it represents something of a royalty payment for access to RIVN's intellectual property, Shlisky said.

The analyst posed several unanswered questions about the remainder of the deals financial structure.

What are the financial and technological milestones that RIVN must meet in order to get the third and fourth billion (and how dilutive will these $2B worth of shares be)? What will be the terms of the fifth billion, a loan expected in 2027? How will RIVN account for the venture?

Shlisky said that he will be more optimistic about the Irvine, California-based company if these key questions are answered.

Price Action: Shares of Rivian pulled back on Friday, down 7.53% and trading at $13.38. Rivian is trading up 29.7% since Monday, at the time of writing.

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