Better EV Stock: Rivian vs. Lucid

Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) were once two of the market's hottest electric vehicle (EV) stocks. Rivian went public at $78 per share in November 2021, and its stock more than doubled to its record closing price of $172.01 a week after its IPO. Lucid went public by merging with a special purpose acquisition company (SPAC) in July 2021. Its shares opened at $25.24 a share and more than doubled to a record closing price of $55.52 just four months later.

But today, Rivian and Lucid stocks trade at about $16 and $3, respectively. Both companies broadly missed their own ambitious production estimates, struggled with supply chain constraints, and racked up persistent losses.

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Should you buy either of these fallen stocks as a turnaround play?

Image source: Rivian.

Rivian bets on the R2 for its long-term recovery

Rivian sells three types of electric vehicles: The R1T pickup, the R1S full-size SUV, and an electric delivery van (EDV) for its top investor Amazon and other commercial clients.

Rivian originally planned to produce 50,000 vehicles in 2022, but it only produced 24,337 vehicles that year as it grappled with supply chain constraints. Its production surged to 57,232 vehicles in 2023 as it overcame those challenges, but it only produced 49,476 vehicles in 2024.

That slowdown was caused by higher rates, a cooling EV market, and a temporary shutdown of its main Illinois plant to upgrade its production capabilities.

In 2025, it expects to produce just 40,000 to 46,000 vehicles as it faces higher tariffs on its raw materials and batteries, new supply chain disruptions, and another shutdown of its main plant to prepare for the launch of its R2 mid-size SUV in 2026. The January fires in Los Angeles, one of its biggest markets, and potential changes to the federal incentives for EVs could exacerbate that pressure.

But despite those formidable challenges, analysts expect Rivian's revenue to rise 5% to $5.24 billion this year as its delivery growth slightly outpaces its production growth.

It also expects its gross margin, which turned positive in the fourth quarter of 2024, to stay green this year as it improves its material, conversion, and depreciation costs per vehicle, sells more regulatory credits to other automakers, and expands its higher-margin software and services business. Analysts expect it to narrow its net loss from $4.75 billion in 2024 to $3.38 billion in 2025.

In 2026, they expect Rivian's revenue to surge 41% to $7.37 billion as it narrows its net loss to $3.33 billion. That rosy outlook relies heavily on a successful launch for the R2, which CFO Claire McDonough claims would be "truly transformative" for its "growth and profitability." If the company pulls off that acceleration, its stock might be a bargain right now at 3.7 times this year's sales.

Lucid faces tougher long-term challenges

Lucid currently sells two vehicles: Its original Air sedan, and the Gravity SUV, which was finally launched after numerous delays in late 2024. The company initially attracted a lot of attention because it was led by Tesla's former chief engineer Peter Rawlinson.

Prior to its market debut, Lucid management claimed the company could deliver 20,000 vehicles in 2022, 49,000 vehicles in 2023, and 90,000 vehicles in 2024. But in reality, it only delivered 4,369 vehicles in 2022, 6,001 vehicles in 2023, and 10,241 vehicles in 2024.

Those underwhelming production numbers -- which Lucid mainly blamed on supply chain constraints and other macro challenges -- drove away the bulls. This February, Rawlinson stepped down and handed the reins over to COO Marc Winterhoff.

However, 2025 might be a brighter year for Lucid as it ramps up its Gravity deliveries. It expects to produce about 20,000 vehicles this year, more than double the 9,029 vehicles it produced in 2024.

Analysts expect its revenue to surge 73% to $1.4 billion as it narrows its net loss from $3.06 billion to $2.78 billion. That's a lot of red ink. But Lucid is still firmly backed by the Saudi Arabian government, which owns more than 60% of its shares through its Public Investment Fund (PIF), and it ended its latest quarter with approximately $5.76 billion in total liquidity.

For 2026, analysts expect Lucid's revenue to nearly double to $2.73 billion as it narrows its net loss to $2.34 billion. That's an optimistic outlook, but its stock isn't that cheap at 6.1 times this year's sales. It's producing fewer vehicles, its gross margins are still negative, and there's no guarantee that the Gravity will stand out in the increasingly crowded market for electric luxury SUVs.

The better buy: Rivian

Both of these EV stocks are still highly speculative investments. But if I had to pick one over the other, I'd buy Rivian. It's ramping up its production at a faster rate, it's losing less money on every vehicle sold, its stock looks cheaper, and it's still led by its founder RJ Scaringe. Lucid might not go bankrupt anytime soon, but it simply hasn't proven that its business model is sustainable yet.

Should you invest $1,000 in Rivian Automotive right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.