While both shares have risen by more than 30% in the past two weeks, there’s only one winner over a longer period. Tesla is up 1,518% in five years while Rivian has crumbled by 88% since listing in late 2021.

Wondering which EV stock looks more attractive right now? Here’s my view.

The two firms at a glance

Let’s start with a big picture overview of the two companies. Tesla’s extensive supercharger network and innovations in battery technology give it a big advantage in the EV market. Beyond this, it focuses on energy storage and solar energy solutions.

Meanwhile, a move into self-driving cars (robotaxis) and humanoid robots provides other potential high-growth avenues.

In contrast, the younger Rivian centres its business model on electric trucks as well as SUVs. Its rugged, adventure-oriented line of EVs sets it apart in a niche market, while a partnership with Amazon, which has ordered thousands of its EV delivery vans, is a key strength.

Rate of growth

I believe both firms have significant market opportunities ahead of them over the long run. However, in the here and now, they’re suffering from a global slowdown in EV sales.

Tesla’s second-quarter deliveries fell 4.8% from 466,140 in the same period last year. This was the first time ever that its deliveries had fallen for two straight quarters.

That said, the figure was better than expected, sending the stock up nearly 20% in the days following the report on 2 July.

Rivian’s second-quarter deliveries of 13,790 vehicles also topped expectations. And it’s guiding for full-year production of 57,000, which wouldn’t be much more than last year’s 50,122.

Here’s how Wall Street currently sees the firms’ revenue growing through to 2026.

Valuation

Rivian is still building out its business and isn’t expected to post any profits for many years. In 2023, it lost $5.4bn and there was a free cash outflow of $5.9bn.

Therefore, I can’t assess the stock on a price-to-earnings (P/E) basis. But it has a price-to-sales (P/S) ratio of around 2.8, a significant discount to previous years.

Tesla, on the other hand, is very profitable. Last year, its net income was $15bn, a 19% increase from 2022. At present though, the stock seems bizarrely overvalued on a forward P/E ratio of 88.

My verdict

Rivian’s massive losses worry me, especially in today’s high interest rate environment. At the current rate of cash burn, it will need more money by the end of next year.

On the plus side, if it could ever scale up to become profitable, the stock may produce monster returns given its much smaller market cap ($14.7bn versus Tesla’s $800bn). That’s a big ‘if’ though.

In August, Elon Musk is set to unveil Tesla’s long-awaited robotaxi. This could be a massive market, though it does face competition, notably from Alphabet‘s Waymo. This firm launched its fully autonomous taxi service (Waymo One) in Los Angeles in March.

I own Tesla shares though I won’t add to my holding at today’s valuation. But my choice between the two? It would be Tesla all day long given Rivian’s huge ongoing losses.

The post Rivian vs Tesla: which is the best stock to buy today? appeared first on The Motley Fool UK.

Shares in Tesla have gained about 37% over the past month. One reason for this is better-than-expected EV deliveries — which were still down 4.8% over 12 months — and this led other New Energy Vehicle (NEV) companies, including Rivian (NASDAQ:RIVN), higher.

But what do analysts forecasts say about Tesla and Rivian? Let’s take a closer look.

Wall Street’s take

According to analysts, Tesla’s trading at a sizeable premium to where it should be. The target price is $182.82, inferring that the stock is 24.61% overvalued.

This is just taking the 34 analysts that have covered the stock in the last three months.

To make things worse, the most recent coverage is from the influential JP Morgan and its analyst puts Tesla stock at just $115.

This should suggest that Tesla stock is overvalued by 52.88%. The lowest share price target is just $22.86 and the highest is $310.

So what about Rivian? Well, like most stocks, it tends to trade at a discount to its share price target.

Despite Rivian surging more than 30% as well in the last 30 days, it’s currently 12.94% discounted, according to the 22 analysts covering it.

However, the latest analyst to cover the stock issued a Buy rating but with a share price target of $13. That’s a 13.22% discount to the current share price.

The lowest share price target is just $8, and the highest is $30.

A deeper dive

Tesla currently trades around 84 times earnings from the last 12 months, and 91 times expected earnings for 2024. This makes it extraordinarily expensive.

However, Elon Musk has been asking investors to treat Tesla like a technology company, which utilises AI and robotics, and not an EV firm.

Tesla is set to unveil its firstly truly autonomous vehicle — the robotaxi — on 8 August. It could be huge for the company if it’s really ready to deploy, with autonomous taxis promising to be a very high margin business.

Musk’s company is also making strides robotics, with the Optimus robot potentially going on sale in the second half of 2025. Musk thinks these robots will be huge business, suggesting it could take the stock to $25trn.

The company is also making strides in robotics, with the Optimus robot potentially going on sale in the second half of 2025. Musk thinks these robots will be huge business, suggesting it could take the stock to $25trn.

Rivian, on the other hand, is a pretender to Tesla’s crown in the EV space. But it’s a long, long way behind. Rivian delivered around 13,790 vehicles in Q2, while Tesla delivered 443,956 vehicles.

It’s also loss-making and remains some way off. Projections suggest that Rivian’s large cash pile could disappear in just two years. This could be accelerated by the release of cheaper vehicles — the R2 and R3 — which typically have shallower margins.

The post Here are the latest price targets for Rivian and Tesla stock appeared first on The Motley Fool UK.

Once the markets closed though, the price soared. In pre-trading today it is up a phenomenal 38%. What on earth is going on – and should I get some of the action?

Major partnership announced

Electric vehicle (EV) maker Rivian has been bleeding cash. Last year, the firm delivered a little over 50,000 vehicles. Revenue was a not-insubstantial $4.4bn.

But the net loss, although reduced from the prior year, still came in at a still-painful $5.4bn. Free cash outflow was $5.9bn.

Yes, the company is selling thousands of vehicles and, yes, those sales are set to grow strongly in coming years. But it is massively lossmaking and is burning through cash like a drunken sailor.

Enter the polar opposite of a drunken sailor… a large, sober, proven German corporation. Specifically, Volkswagen. Yesterday, it was announced the giant carmaker and Rivian are entering a joint venture.

Why investors are excited

That announcement is why the stock soared in after hours trading. It is also why I expect we will see a sharp move upwards as soon as the main market opened this morning (US time). That said, we may see wild moves both up or down in today’s New York trading session.

Why are investors so excited?

For a company burning through cash like Rivian, the prospect of any investment that improves the balance sheet can be exciting, depending on what strings are attached.

On top of that, when it comes to making and selling vehicles, Volkswagen clearly knows what it is doing. Last year, it sold 9.2m.

So for such a seasoned operator to see significant value in Rivian bolsters the sense that the EV company may really have developed something that has high value.

Volkswagen is not spending $5bn on the stock

But here’s the rub. Volkswagen is not putting its money into this stock right now – and maybe not at all.

It is setting up a joint venture with the company, which both firms will own and control equally. The announcement talked of “a total expected deal size of $5 billion”. Of that, only $1bn is likely to come soon. ”Up to $4 billion in planned additional investment” is an aspiration subject to conditions being met — not a concrete commitment to inject the money.

That $1bn will be in a form of convertible loan notes, so should convert into Rivian stock.

The other $4bn, if it ends up coming at all, will be in the form of $2bn put into the stock and the same amount split across a cash injection and loan for the joint venture.

Strategic investment perspective

I am an investor not a trader. So I would not buy the shares hoping for a short-term bounce.

From a long-term perspective, Volkswagen appears to like Rivian’s technology. I see its move as a vote of confidence from a strategic investor on the tech. That is not the same as a vote of confidence from a financial investor on the valuation of the stock. I have no plans to invest.

The post Rivian stock looks set to soar today! Should I buy? appeared first on The Motley Fool UK.

Burning cash

A major concern I have is its lack of profitability. As a young company still in its growth phase, Rivian is burning through cash to ramp up production and develop new vehicles. While this cash burn is somewhat expected in the EV startup world, the sheer speed at which the firm is depleting its reserves is alarming.

Reports indicate a decline from nearly $20bn in late 2021 to under $8bn today. This trend raises questions about whether the company can continue over the long run without additional funding.

Even more concerningly, losses have been accelerating in recent years, increasing at 35% annually.

Competition

The EV market is becoming increasingly crowded. Established automakers like Ford and General Motors are pouring resources into developing their own electric vehicles. Additionally, Tesla continues to dominate the market share, making it difficult for new entrants to gain a foothold.

These newcomers face an uphill battle in convincing consumers to choose its brand over more established players with proven track records, especially in less established regions globally.

Let’s take a look at the numbers, firstly the price-to-sales (P/S) ratio, since the company is unprofitable. The ratio of 2.8 is much higher than the calculated value of 0.3 times. Even with growth expectations of 33% over the coming years, I fear that the market isn’t convinced. With the share price down by over 50% in 2024 alone, I find it hard to disagree.

The company has ambitious plans for the future, with its R1T pickup truck and R1S SUV already generating interest. As many investors in the EV space know, translating those plans into reality is a different story. Manufacturing delays and production hiccups could severely hamper the ability to meet targets and emerge as a reliable brand.

In a period of economic uncertainty and high interest rates, investors should be wary of the inherent risk associated with a young company navigating the complexities of large-scale auto production.

As Tesla CEO Elon Musk has noted many times in recent years, high interest rates and potential economic downturns could dampen consumer enthusiasm for high-priced electric vehicles. In this environment, government incentives for EVs could be scaled back or eliminated, making it even more difficult for newer players to establish themselves.

Friends in high places

Rivian boasts a strong partnership with Amazon, which has pre-ordered a significant number of delivery vans. However, this also creates a situation where success is somewhat tethered to the fortunes of another company. If Amazon changes its delivery strategy or decides to source vans elsewhere, it could be a major blow to Rivian’s production volume and revenue stream.

The bottom line

Rivian holds the potential to be a major player in the EV landscape. The company’s innovative vehicles and strong partnerships are impressive. However, for me, the current picture is far from rosy.

The combination of unproven profitability, a crowded market, execution risk, and economic uncertainty makes this a gamble at best. I’ll be staying well clear of Rivian stock for now.

The post Here’s why I’m staying well clear of Rivian stock appeared first on The Motley Fool UK.

However, as investors mull why Tesla is trading at 58 times forward earnings — it’s incredibly expensive for a company that’s currently in reverse — should we start looking at Rivian instead?

What Wall Street says

When I’m assessing how much a stock should be worth, one of the first places I look is the share price targets. These are ratings provided by analysts and they provide a good insight into what the stock should or could be worth.

In the case of Rivian, the average share price target is $17.58, representing a 71.6% premium to the current share price. That’s a very good sign. It’s worth noting that Tesla tends to trade very close to its share price target.

Rivian stock has 11 Buy ratings, five Outperform ratings, 10 Hold ratings, one Underperform rating, and one Sell rating. Despite this bullishness, it’s worth recognising that share price targets are not always updated as frequently as we might expect. Some can be outdated.

Not much better over here

While things might not look great for Tesla right now, it’s not much better with Rivian. It delivered much stronger growth than Tesla during 2023. But as Tesla went backwards, it wasn’t overly hard to do so.

In 2023, the Irvine-based company delivered 50,122 vehicles and brought in $4.4bn in revenue, which is more than double what it achieved in 2022. Overall losses narrowed in 2023 to $5.4bn, down from $6.7bn in 2022.

However, there are several issues, including margins. In the fourth quarter of 2023, Rivian’s gross margin was -46%, meaning it lost money on every vehicle sold. This margin equates to a staggering $43,372 per vehicle delivered.

The margins actually got worse towards the end of the year, although it’s worth noting that $43,372 was an improvement from a $124,162 loss per car in Q4 of 2022.

Guidance

Perhaps the most concerning thing is that Rivian produced 57,232 vehicles in 2023, and it only plans to produce 57,000 in 2024. Actually, the company’s Q4 production rate was the equivalent of 70,000 vehicles per year. So, management is slowing production!

The company pointed to economic and geopolitical challenges, notably high interest rates, as a reason for pulling back output guidance.

The bottom line

Rivian isn’t expected to reach break-even until 2029. That’s a long way away, and it’s currently burning through capital at a fast rate. It ended the fourth quarter of 2023 with $9.4bn in cash, but given its burn rate, I’d expect to see it have liquidity issues towards the end of 2025. This means raising more cash or diluting shares.

Rivian isn’t my EV pick!

The post Should I buy Rivian stock as Tesla’s allure fades? appeared first on The Motley Fool UK.

But few expect the electric car maker to repeat this performance over the next decade. If it did, it would have a stock market valuation of over $14trn by 2033 — Apple‘s is currently under $3trn.

A success story

In 2014, Tesla sold 31,655 vehicles. During 2023, it expects to shift 1.8m.

For comparison, Toyota is currently the largest automotive manufacturer in the world, selling 10.5m units in 2022. There’s clearly potential for significant future expansion.

But as the company matures, I doubt Tesla’s shareholders will ever again see the same explosive growth of the last 10 years.

Chalk and cheese

During Q3 2023, Elon Musk’s company made an automotive gross profit of $3.67bn, on sales of $19.63bn. That’s $8,431 a vehicle — a margin of 18.7%.

Contrast this with the performance of Rivian Automotive (NASDAQ:RIVN).

During the same period, it sold 15,564 of its electric pick-up trucks and SUVs. It reported revenue of $1.34bn, but recorded a gross loss of $30,648 for every vehicle sold.

In other words, it’s selling its vehicles for less than the cost of producing them. And that doesn’t take into account overheads. If these and interest charges are included, the loss per unit during the quarter increases to a massive $87,831.

Given that the list price of Rivian’s base model is around $75,000, it’s clear to me that the company is a long way from being profitable.

However, shareholders can take some comfort that its performance is improving quarter on quarter.

Through a combination of economies of scale, supplier price reductions and technological innovation, Rivian hopes to be breaking even by the end of 2024.

Then and now

But the world’s a different place to what it was 10 years ago.

In 2014, Tesla had an automotive margin of 27.6% and its gross profit per vehicle was $27,877. Both companies would be happy with similar figures today.

The company was a pioneer and the first significant player to enter the market. It was considered a niche manufacturer and faced little competition. Now there’s fierce rivalry with every mainstream producer selling electric models. In response, Tesla has cut its prices twice in 2023.

And due to these structural changes in the industry, I believe there’s less scope for Rivian’s stock price to emulate the success of its larger rival.

But assuming it doesn’t run out of cash — its chief executive says it won’t need to raise any more money until 2025 — I see great potential for the company.

Its market cap is currently around $15bn, and Tesla’s is $675bn.

Due to the former’s losses, it’s difficult to compare these valuations. However, using the price-to-sales ratio for the past 12 months, Tesla’s appears much more inflated. It trades at nearly seven times revenue, compared to Rivian’s 3.86.

This suggests the smaller company presently offers better value.

On balance, I think Rivan would make the better investment. Its vehicles receive good reviews and American’s love their pick-up trucks. But even at $16 a share, over the next decade I don’t think it will match the historical performance of its more famous rival.

Even so, the next time I have some spare cash, I’m going to consider taking a position.

The post Could investing in Rivian at $16, be like buying Tesla stock 10 years ago? appeared first on The Motley Fool UK.

GlobalData is forecasting that the electric vehicle (EV) market will grow at an annual rate of 15.9% between 2023 and 2035. I’m wondering which companies are best placed to benefit from this.

Tesla

Tesla (NASDAQ:TSLA) stock is currently changing hands for the price it was in June 2023.

Four months of no growth is concerning for a company that built its reputation on delivering exceptional returns to shareholders.

The latest figures from the company are also disappointing.

It delivered 435,059 cars in the third quarter of 2023, which was 4.7% below expectations.

Tesla is also cutting prices across its range. It did this in March 2023 and has decided to do it again. As an example, the list price of its basic Model 3 was reduced by $2,000 earlier this year, and a further reduction of $1,250 has just been announced.

Although this might increase the number of cars sold — and hurt some of its rivals — it’s unclear whether this additional revenue will compensate for the loss of earnings.

But Tesla is still the world’s most valuable EV manufacturer. It has a market cap of $837bn, compared to $36bn for China’s Li Auto, which is in second place.

There are other mainstream manufacturers that make both conventional and electric vehicles. But none of these have valuations higher than Tesla’s.

And that’s always been a problem for me.

According to Macrotrends, Tesla currently has a price-to-earnings ratio of 73, which makes it very expensive, although it has been higher.

Rivian

I’ve always liked the fact that Rivian Automotive (NASDAQ:RIVN) is currently producing more vehicles than Tesla was at the same stage. And its trucks and pickups are better looking than anything its larger rival makes.

But my confidence in the company has been shaken.

On 9 August 2023, its CEO told Bloomberg: “the cash that we have has put ourselves in a position to not need capital until the end of 2025“.

However, 57 days’ later, the company announced plans to raise $1.5bn via convertible notes.

Not surprisingly, investors reacted badly and its stock closed 22% lower on 5 October 2023.

But in the third quarter of 2023, deliveries were 15,564, 11% more than the average of analysts’ forecasts.

The fund raising is intended to de-risk the launch of the R2 sports utility vehicle but it’s turned into a bit of a PR disaster.

Alternatives

With the shine coming off these two manufacturers, I’m wondering what the next high-growth EV stock might be.

Of the 10 most valuable, nine are relatively small, producing no more than 150,000 vehicles a year.

And yet some of their valuations are even more astronomical than Tesla’s.

VinFast Auto of Vietnam produced only 11,315 cars during the first half of 2023. But it’s valued at $18bn!

Verdict

If I had to pick the best EV growth stock, I would still choose Rivian. But I don’t like it enough to buy any stock. I think it’s the best of an expensive bunch.

The recent fall in its stock price could be a buying opportunity. But I’ve lost confidence in the management.

I’m therefore going to wait until the financial position of the company becomes clearer before deciding whether to invest.

The post Are Tesla and Rivian the best EV growth stocks? appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Meta Platforms

What it does: Meta Platforms is an American multinational technology conglomerate based in California.

By Dr James Fox. Meta Platforms (NASDAQ:META) shares have surged along with other tech stocks this year. However, Meta stands out as a solid cash-generating business with exceptional margins, and recently shares dipped.

The company formerly known as Facebook has significantly outperformed the IT sector, delivering back-to-back earnings beats over the last quarter. It has cash from operations of $55bn and gross margins of 79%. The company also posted EPS growth of 21%.

Recent optimism has been driven by the launch of Threads, which is now the fastest-growing app ever. It has an estimated 125m users, having been launched on 5 July. Assuming continued growth, the app could generate as much as $3bn in revenue in 2024, according to analysts’ forecasts. The launch of Reels, Llama2, and broader cost-cutting initiatives should power the company forward in the coming years.

However, constant innovation is key in the ever-evolving tech sector as newcomers and AI have the power to change market dynamics. Meanwhile, Reality Labs – the metaverse operation – remains loss-making.

James Fox owns shares in Meta Platforms.

Nike

What it does: Nike is the world’s largest supplier of athletic shoes and sports clothing equipment.   

By Ben McPoland. Nike (NYSE: NKE), the iconic global sportswear brand, has hit a rough patch. In fact, its share price sprinted downhill for 11 consecutive trading days in August, its longest losing streak since the company went public in 1980. The stock is down 40% in two years.

One major concern is the faltering Chinese economy. Around a fifth of the retailer’s profits come from China, so this is a huge potential headwind. Also, its wholesale partner Foot Locker recently reported a poor quarter, suggesting that US consumers may be holding back on buying new footwear.

However, over the long term, Nike should still benefit from the rise of the global middle class and their preference for high-quality goods. Plus, its Converse brand remains extremely popular.

So, I suspect the cyclical struggles this best-in-class retailer is facing will prove temporary. The stock isn’t cheap on a P/E multiple of 30, but Nike has more than $10bn of cash on the balance sheet. I’m inclined to see the stock’s price dip as a buying opportunity.

Ben McPoland owns shares in Nike.  

Rivian Automotive

What it does: Rivian Automotive makes electric pick-up trucks and SUVs at its manufacturing plant in Illinois.

By James Beard. Since 8 August, when Rivian Automotive (NASDAQ:RIVN) announced a smaller loss than expected and raised its annual production target by 4%, its shares price has fallen by nearly 20%. This looks like an excellent buying opportunity for investors considering the stock.

The company is now forecasting sales of 52,000 vehicles in 2023 — Tesla took a year longer to achieve a similar number.

Rivian’s vehicles generally receive good reviews and it’s reducing costs. It also has a big backer — Amazon has a 17% stake. Crucially, its chief executive says the company has sufficient cash to see it through to 2025.

My biggest concern is the impact of Tesla’s much-hyped Cybertruck, which is due imminently. It’s far cheaper than Rivian’s, and its quirky styling is likely to develop a cult following.

But the market for electric vehicles is going to be huge. This means there’s plenty of room for both companies to co-exist alongside one another.

James Beard does not own shares in any of the shares mentioned.

The post Best US stocks to buy in September appeared first on The Motley Fool UK.

Beset by production delays and supply chain problems it’s since fallen by over 80%.

Early days

The company is still in its infancy. In 2023, it’s expected to sell 50,000 units — 97% fewer than its larger rival. But as recently as 2015 Tesla was producing a similar number.

And Elon Musk’s company has come a long way over the past eight years. Worth over $840m, it’s still the motor industry’s number one and has a market cap equal to the combined value of the next nine on the list. In 2022, it reported sales of $81.5bn and a pre-tax profit of $13.7bn.

Back to the future

Rivian is forecasting sales of 92,000 and 115,000 in 2024 and 2025 respectively.

If it achieves these figures it will be growing faster than Tesla did in 2016 and 2017, the two years after it delivered 50,580 cars, a similar number to what Rivian is expecting to sell this year.

By 2030 it hopes to reach 1m. It took its more established competitor 11 year to reach this milestone. If successful, it will have done it in nine.

But it’s easy to produce impressive forecasts. The reality is that it’s presently losing money. In 2022, it made a loss before tax of $6.7bn on revenue of $1.7bn. This is seven times more than Tesla’s loss in 2015, when it was at a similar stage of development.

Picking winners

So which would I choose?

Rivian’s range is limited to a pick-up truck (TX1) and a sports utility vehicle. It also makes vans for Amazon, which has a 17% stake in the company. But they’re all expensive. For example, a TX1 has a list price of $74,800.

And later this year it will face direct competition from Tesla, when the automotive giant delivers its first long-awaited Cybertruck.

Pre-orders are close to 2m, even though those paying a deposit today will probably have to wait five years before driving their vehicle. It’s currently priced around $50,000 and this relatively low figure is in line with the company’s newly-adopted strategy of cutting prices — by up to 20% — to boost sales.

And this strategy appears to be working. The Model Y was the world’s best-selling vehicle during the first quarter of 2023. However, the impact on earnings isn’t yet clear.

Tesla’s forward price-to-earnings ratio is currently around 80 which would normally put me off buying. But although it’s extremely high, it’s much lower than it was a year ago, when it was in three figures. This could be an ideal buying opportunity.

Decision time

But I think there’s greater potential upside with Rivian’s stock — it’s more likely to double in value more quickly than Tesla’s.

Its vehicles receive good reviews from the automotive press. And Americans love their trucks and SUVs. In 2022, Ford alone sold 640,000 pick-ups.

Importantly, at the end of 2022 it still had $11.6n in the bank which the directors say should be enough to see the company through until 2025.

For these reasons, the next time I have some spare cash I’m going to seriously consider buying a stake in Rivian.

The post Should I forget Tesla and buy Rivian Automotive stock instead? appeared first on The Motley Fool UK.

At such a huge discount on its previous price, is the American electric vehicles (EV) maker now a buy?

An 89% fall

So, to answer whether I’m buying here, let’s start with why the stock has dropped so much. Shortly after IPO, it reached an outrageous valuation – over $100bn – that was perhaps dragged upwards by the hype from EV competitor Tesla. 

The problem is that revenues were, and are, extremely low by comparison. The carmaker made $1.7bn in revenue last year and $661m in Q1 2023. That looks tiny even compared to the post-crash valuation of $13bn. And how much of this is earnings? Well, none actually. The firm posted a $7bn net loss for 2022 and looks a million miles from profitability. 

With those figures, it’s not hard to see why the shares have dropped so much. That’s because from here, to see this as a good buy, I’d need to see Tesla-esque levels of growth. That is to say, over 40% growth year on year while turning margins positive. That sounds like a big ask to me.

And it seems other investors aren’t bullish on its chances. The firm has 77m shares ‘shorted’. That makes a short interest of 12.8%, which is the highest it’s ever been for this young company. 

With so many investors betting on this stock to go down, what chance does it have of doing the opposite?

Reasons to buy

I don’t think it’s all doom and gloom and the reason for that is its products. The Rivian R1T – the first electric truck brought to market – is by all accounts a superb electric vehicle that has already won a bunch of awards.

The R1T and its SUV counterpart the R1S are on the roads now too. Production guidance for 2023 was 50,000, up 100% from the year before. Zero vehicles had been produced at the time of its IPO, by the way. And while still loss-making, the firm claims it’s on course to make positive gross profit in 2024. 

What’s more, the company has around $12bn in cash or cash equivalents to tide it over until profitability. That sounds like a lot but will get quickly used up if it can’t bring down current losses. Still, it’s good for two or three more years while things get up to speed.

Arguably, Rivian is in a similar position to Tesla before it exploded. And who doesn’t wish they’d bought shares there in 2019? However, it feels like expecting lightning to strike twice. And it might be especially difficult as it has Elon Musk’s firm to compete with, which already has a 65% market share and will soon release its own electric truck.

All in all, the many risks mean this stock isn’t a buy for me. I’ll be looking at other cheap shares for my next purchase.

The post Down 92%, is cheap Rivian stock finally a buy? appeared first on The Motley Fool UK.