This EV Stock Is Way Cheaper Than Tesla
Key Points
Tesla remains a promising growth story.
Other EV stocks also offer compelling value.
One worth a closer look now is Rivian Automotive.
- 10 stocks we like better than Rivian Automotive ›
Tesla (NASDAQ: TSLA) remains one of the most exciting electric-vehicle (EV) stocks on the market today. The company is rapidly investing in its robotaxi division, which could ultimately become a $5 trillion to $10 trillion opportunity.
However, Tesla isn't the only game in town. If you're betting on EVs, you'll want to consider a position in the company below. Its stock price is way cheaper than Tesla's right now.
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Rivian stock has a far-more-compelling valuation than Tesla shares
Tesla's stock may be fairly valued, based on its exciting growth opportunities, but that doesn't mean its valuation is easy to stomach. Right now, shares trade at nearly 16x sales. Rivian Automotive (NASDAQ: RIVN), meanwhile, trades at just 3x sales. With a market cap of $18 billion, Rivian also has significantly more growth upside potential than Tesla, which trades at a $1.2 trillion valuation.
Why does Rivian trade at such a cheap valuation? For two obvious reasons.
Image source: Rivian.
First, Tesla has a heavy capital advantage versus Rivian. This is critical in a capital-intensive industry that's rife with financial failures. Second, Rivian hasn't yet proven it can tap the mass markets. However, that could all change in 2026 when Rivian expects to begin production on three new affordable models, all of which are expected to debut with prices under $50,000.
While Tesla remains an exciting growth stock, don't ignore other electric vehicle manufacturers like Rivian, which today arguably offer much more value.
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.
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