EVs Are Out of the Headlines. That's Exactly Why These 2 Stocks Are Buys.

A few years ago, growth investors were rushing toward electric vehicle (EV) stocks. But today, high-growth AI stocks and big IPOs have largely overshadowed the EV market. Concerns about lower government subsidies, higher tariffs, supply chain disruptions, inflation, and elevated interest rates are also making EV stocks less attractive -- even if the market is still growing.

From 2026 to 2033, Grand View Research still expects the global EV market to grow at a 26.7% CAGR as EVs continue to replace gas-powered vehicles. To capitalize on that trend, investors should buy these two EV stocks while the bulls look the other way.

Image source: Rivian.

Rivian Automotive

Rivian (NASDAQ: RIVN), which went public at $78 in 2021, currently trades at about $16. But it's valued at less than two times next year's sales, while Tesla (NASDAQ: TSLA) trades at 13 times next year's sales. Rivian's low valuation reflects its ongoing production issues.

Before launching its R2 SUV this year, Rivian only sold three vehicles: the R1T pickup, R1S SUV, and custom electric delivery vans for Amazon and other companies.

It more than doubled production from 24,337 vehicles in 2022 to 57,232 in 2023, but only produced 49,476 in 2024 and 42,284 in 2025. It blamed that slowdown on supply chain constraints, reduced EV subsidies, and intense competition from other EV makers. The high starting prices of about $77,500 for the R1T and R1S further limited their mainstream appeal.

However, Rivian expects the R2 -- which launched at $57,990 this March -- to boost its annual deliveries to 62,000-67,000 this year. Analysts expect its revenue to rise 31% for the full year. It plans to launch a cheaper version of the R2 for about $45,000 in late 2027.

The R2 actually costs less to manufacture than its R1 vehicles, since it uses fewer electronic control units, an upgraded battery pack, simpler wiring, and larger castings. Therefore, the rising sales of the R2 should boost its gross margins and narrow its losses.

From 2025 to 2028, analysts expect Rivian's revenue to more than triple, from $5.4 billion to $16.9 billion, as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn positive in the final year. We should take those rosy estimates with a grain of salt, but Rivian might be on the cusp of a historic turnaround if the R2 attracts more drivers.

Nio

Nio (NYSE: NIO), a major EV maker in China, went public at $6.26 per ADR in 2018. But today, it trades at about $5 and looks like a screaming bargain at less than one times next year's sales.

Nio's discount reflects the ongoing concerns regarding its steep losses and competition from other EV makers. But from 2020 to 2025, its annual deliveries surged from 43,728 to 326,028 vehicles, and its revenue rose at a 40% CAGR.

Nio sells a wide range of electric sedans and SUVs and differentiates itself from competitors with swappable batteries, which can be quickly replaced at its own battery-swapping stations as a faster alternative to charging. It also produces its own Shenji chips, which are more powerful than Nvidia's Orin-X chips, to support its autonomous driving features.

Nio is still growing rapidly as its namesake brand captures a larger share of China's premium EV market. It's selling more low-end SUVs and compact cars through its new ONVO and Firefly sub-brands, respectively, and it's gradually expanding into the European market. From 2025 to 2028, analysts expect its revenue to nearly double to 174.4 billion yuan ($25.8 billion).

Nio's vehicle margins are improving as economies of scale kick in, and its recently spun off its unprofitable chipmaking segment (as GeniTech) to reduce its operating expenses. It's stayed profitable for the past two quarters, and analysts expect it to post its first full-year profit in 2027. All of these catalysts suggest Nio's stock is grossly undervalued -- and it could deliver multibagger gains over the next few years if the market revalues it as a growth stock again.

Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Nvidia, and Tesla. The Motley Fool has a disclosure policy.