The EV Stock That's Better Than Tesla
Key Points
Industry titan Tesla is broadening its focus and deprioritizing EVs.
Meanwhile, Rivian is preparing to launch its R2 lineup in 2026.
Shares of the upstart EV maker are up nearly 69% year to date.
- 10 stocks we like better than Rivian Automotive ›
Tesla (NASDAQ: TSLA) doesn't want to be known only for its electric vehicles. Elon Musk's company is shifting gears away from its car business and focusing more on AI-forward technologies, such as autonomous driving and robotics. Thus, a lane is opening up for a new EV stock to take the lead. Rivian Automotive (NASDAQ: RIVN) has as good a chance as any to do it.
Rivian is steadily gaining traction in brand recognition and is consistently ranked among the best EVs on the market. Rivian is also getting ready to launch its R2 lineup of vehicles in early 2026.
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Image source: Getty Images.
Tesla's price is based on future endeavors
There are a few reasons to like Rivian stock more than Tesla right now. First, it's trading at a much more reasonable price. Tesla's extraordinarily high price-to-earnings ratio is well over 300 and the stock is close to its 52-week high price of $495 as of Dec. 19. There's a lot of excitement and hype around Tesla and what it may do with its move into broader AI, which is why the stock trades at a premium. If Tesla solely focused on remaining an EV company, its valuation would almost certainly be lower.
The Rivian comeback is here
Rivian is in the midst of a comeback. The company is down almost 79% from its market debut in 2021, but reported revenue growth of 78% in its latest quarterly release. Rivian is expected to move into the mass market with its next generation of vehicles. The R2 lineup will start in the $45,000 range, in line with most SUV pricing.
Rivian's ambitions aren't quite as wide as Tesla's, but it has plans for autonomous driving and AI systems, which were discussed in its December "Autonomy and AI Day." It's still early for Rivian, and there's a lot of upside left to capture if the company can succeed with the launch of its new fleet. Analysts are feeling more confident about Rivian's direction, which is why it may be a better choice than Tesla currently.
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Catie Hogan has positions in Rivian Automotive. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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