Better EV Stock: Rivian vs. Lucid

Deciding between buying Rivian (NASDAQ: RIVN) or Lucid (NASDAQ: LCID) stock is a little tricky right now. Both companies sell fantastic electric vehicles that have earned high praise from automotive publications and expert reviewers.

But the EV market is difficult, and selling good products isn't enough to ensure a company is worth investing in.

Here's what's happening with Rivian and Lucid, why Rivian stock is the better one to own, and why investors will have to be patient to see the company's potential success.

Image source: Rivian.

Lucid's EV ambitions may be short-circuiting

Lucid has been a paradox for a while. On the one hand, the company is making significant improvements, including year-over-year production rising 55% in 2025 and revenue rising 68% to nearly $1.4 billion.

On the other hand, Lucid has had significant losses for years, management uncertainty, and a constant need for additional capital infusions. Production issues for its recently launched Gravity SUV haven't helped either.

Lucid's generally accepted accounting principles (GAAP) net loss was $12.09 per share in 2025, and the company has had to raise additional capital to help offset those losses. The most recent infusion came from a combined $1 billion investment from a Saudi Arabian Public Investment Fund affiliate and Uber Technologies, as well as from the sale of additional common stock.

The Saudi public fund owns an estimated 57% stake in Lucid and has made several large investments in Lucid. But if it decides at some point that the company is no longer viable, it could be difficult for Lucid to stand on its own feet.

What's more, Lucid has made several additional public offerings of common stock, which have diluted existing shareholder value multiple times.

And then there's Lucid's management issues. The company is currently on its third CEO in just four years, and its CEO, Silvio Napoli, is an industrial expert who ran the Schindler Group, an escalator and elevator manufacturer.

At this point, bringing in an outsider might be a good strategy for Lucid, but it's too early to tell, considering Napoli took the helm in June. He's also made some big moves at the company, including cutting 18% of Lucid's workforce, which was aimed at reducing costs by $158 million.

That move comes after Lucid laid off 12% of its workforce in February.

To recap, Lucid's production is ramping up, but the company is highly unprofitable, has laid off many of its staff, has had difficulty finding the right management, and has to continually raise new funds.

Rivian is trying to jump-start sales with its new R2

Rivian has had its fair share of difficulties as well. The company ended 2025 with a 14% decline in vehicle production, sales up just 8%, and a GAAP loss of $3.79 per share.

Rivian also recently cut its workforce by less than 2% in June, following two rounds of layoffs last year.

But the company has also made significant financial improvements. Rivian achieved two quarters of gross profitability in 2025, driven primarily by sales from its software and services segment.

Yet, it's the company's rollout of its new R2 vehicle that might make the stock a buy right now. The R2 platform is a smaller SUV than the company's large R1, and starts at around $58,000.

That's about $9,000 more than the average cost of a new car, and Rivian has a plan to continually roll out cheaper versions of the R2, eventually selling a $45,000 base version sometime next year.

These lower-priced R2 models could be the key to Rivian's success in the coming year as it seeks to expand its customer base.

Rivian is the clear choice

It's worth noting that Rivian is led by RJ Scaringe, who founded the company in 2009. That leadership stability and personal connection to its success are one of the reasons why I've held onto my Rivian shares through some pretty volatile times over the past few years.

A founder-led company is an asset for most companies, though it doesn't guarantee success.

Lucid, in contrast, has shifted leadership many times in its short history. The company also hasn't achieved the gross profitability that Rivian has, nor does it have a current, cheaper model already on sale (it has announced lower-priced models, but production hasn't started yet).

To be clear, the next few years could be challenging for both companies. The EV market is still in a difficult spot amid high consumer costs. But Rivian has better leadership and a clearer plan for the success of a cheaper EV model that gives it the edge in this match-up.

Chris Neiger has positions in Rivian Automotive. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.