May 10 Reuters Shares of Rivian Automotive Inc rose 7 on Wednesday as its positive earnings stood out in a poor quarter for electricvehicle startups, but analysts warned that stiff competition will be a hurdle in its path to profitability.

The company looked set to add nearly 800 million to its market valuation, based on premarket stock prices, after it reiterated its annual production forecast and beat quarterly revenue estimates.

The results showed how Rivian39;s move to raise prices last year has helped the EV maker stem cash burn at a time when peers Lucid Group Inc and Nikola Corp are struggling with ballooning losses.

We do see the average selling price continuing to expand and grow, CEO RJ Scaringe said, adding that Rivian39;s expanded offerings including a larger battery called the Max Pack will aid demand.

Still, some analysts were skeptical about the prospects of a company that is caught in a price war started by market leader Tesla Inc and faces increasing competition from wellheeled legacy players such as Ford Motor Co.

We continue to like the truck, but not necessarily the stock and the headlines that may be ahead, said Michael Shlisky of D.A. Davidson, who was among the 10 analysts that lowered their price target on a stock that has declined 25 this year.

Shlisky said Rivian has seen some success in reducing costs by switching to selfmade Enduro motors and cheaper lithium iron phosphate batteries, but its efforts to renegotiate with suppliers for…