12:18 PM EDT, 08/07/2024 (MT Newswires) -- Rivian Automotive ( RIVN ) is preparing for Gen 2 R1 vehicle production and the R2 launch in early 2026 with a boost from the Volkswagen joint venture expected to strengthen its balance sheet by Q4, Wedbush said Wednesday in a report.

Rivian made some "significant improvements" in production in the R1 lineup, "a necessary step for the company's future trajectory," with a 30% boost in the output rate expected to underpin future margins. Wedbush said.

On Tuesday, the electric vehicle maker's Q2 revenue at $1.16 billion topped Wall Street estimates with a $860 million loss on adjusted earnings before interest, taxes, depreciation and amortization trailing forecasts, while the company maintained full-year guidance, Wedbush said.

The Volkswagen venture is pivotal for Rivian's growth, aiding in profitability, production and cost savings, Wedbush said. "While profitability remains a key focus of the Street, it now feels that the tires are hitting the road for the automaker with a clear vision ahead and will continue to chip away at its checklist to continue building back trust around its name," the report said.

Wedbush maintained an outperform rating on Rivian with a 12-month price target of $20.

Rivian shares fell 3.4% in recent Wednesday trading.

Price: 14.30, Change: -0.50, Percent Change: -3.38