2 Reasons Why Now Is the Time to Buy Rivian Stock

Key Points

• Tesla is stealing the headlines with its robotaxi service.

• But Rivian is quietly building toward a revolutionary 2026.

• Investors would do well to pay attention to this upstart rival.

• 10 stocks we like better than Rivian Automotive ›

Tesla is stealing the headlines with its latest robotaxi service, which recently launched in Austin, Texas. Rivian Automotive (NASDAQ: RIVN), meanwhile, has stayed in the shadows due to a lack of flashy milestones. But if you're looking to buy an exciting electric car stock that could one day become the next Tesla, it's time to take a closer look at Rivian.

In 2026, everything will change for Rivian

Right now, Rivian shares trade at a sizable discount to competitors like Lucid Group and Tesla. Lucid stock trades at 7.1 times sales while Tesla shares trade at an 11.5 multiple. Rivian shares, however, trade at just 2.7 times sales.

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Much of this discount is warranted. Rivian's sales growth should be a lot slower this year than Lucid's. Tesla, meanwhile, has a significant capital advantage, as well as long-term upside from exciting opportunities like its robotaxi division.

Starting in 2026, however, everything will change for Rivian, reenergizing growth rates right as the stock's valuation hovers around multi-year lows.

Image source: Getty Images.

In early 2026, Rivian expects to begin production of the R2, a midsize SUV with an expected price tag of around $45,000. Soon after, production of the R3 and R3X -- midsize SUVs with even lower starting price points -- is expected to begin. By the end of next year, Rivian will potentially more than double its current lineup, adding significantly more affordable options that will attract the attention of tens of millions of new buyers.

It won't just be sales that climb next year. Rivian's gross margin may also improve due to greater economies of scale. Already, the company has experienced a 34% drop in R1 manufacturing costs simply by getting the R2 ready for production. Overall margins may suffer from the recent elimination of federal regulatory credits. But Rivian's long-term, normalized margins should be on the rise.

With shares trading at multi-year lows, now is the time to buy Rivian before these financial catalysts kick in next year.

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

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.