It's been a bumpy ride for many electric vehicle stocks over the past few years, and both Rivian (RIVN -4.26%) and Lucid (LCID -6.12%) have felt each jarring pothole. Rivian's shares have tumbled 79%, and Lucid's have fallen 92% over the past three years as of this writing. https://tinyurl.com/5n7tzdd7
If those figures haven't scared you off, then you might, like me, have a long-term optimistic view of the EV market. And there have been glimmers of hope. Sales of electric vehicles rose 7% in the U.S. last year, reaching 1.3 million.
However, not every EV startup will make it through this difficult time and emerge stronger for it. So, based on what's happening now, does Rivian or Lucid look like the better EV stocks? Let's take a look.
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Lucid: Impressive vehicles, increasing losses
Lucid's high-end Air sedan and recently launched Gravity SUV have rightly impressed automotive enthusiasts. The Air won MotorTrends' 2022 Car of the Year in its very first model year and recently won the 2024 Best Luxury EV by Top Gear Electric. The Air also recently made it on its Car and Driver's coveted 2025 10Best Cars List, calling attention not just to its 400 miles of estimated EPA range but also the Air's impressive driving experience and luxurious interior.
Why should all of that matter? The automotive market is highly competitive, especially when it comes to EVs, and new startups need to make products that stand out. Lucid has accomplished this, but unfortunately, it hasn't translated to impressive sales.
The company had just $200 million in sales during the third quarter (ended Sept. 30), and its net loss expanded to $992 million, higher than the loss of $630 million in the year-ago quarter. The company managed to increase vehicle deliveries by nearly 91% to 2,781 vehicles, but vehicle production was mostly unimpressive. Lucid made just 1,805 vehicles, a modest 16% increase from Q3 2023.
Lucid raised an additional $1.75 billion in funding last year, which the company says gives it a financial runway "well into 2026." Beyond that, though, Lucid needs to start standing on its own by significantly increasing production and lower costs.
Rivian: Production hiccups, gross profit, and a promising lineup
It hasn't been smooth sailing for Rivian, either. The company recently released its 2024 production and delivery numbers, with Rivian making just 49,476 vehicles last year, down 13.5% from 2023. Meanwhile, deliveries only rose 3% to 51,579.
The good news is that Rivian's management said that component shortages that caused a production slowdown last year "are no longer a constraint on Rivian's production." Hopefully, that'll clear things up for Rivan's future production and deliveries, but investors will be watching this closely.
The good news is that Rivian cut 35% of its cost of materials across its van, truck, and SUV production, and the reengineering should pay off soon. Rivian's management still expects the company to be gross profit positive in the fourth quarter (financial results will be released on Feb. 20).
While Rivian still has significant losses -- $1.1 billion in the third quarter -- the company achieving its gross profit goal soon and significantly cutting material costs is a positive sign that management is focusing on narrowing its losses.
Another thing that makes me optimistic about Rivian's future, despite its difficulties last year, is that Rivian will release several new models over the next couple of years. Late last year, it introduced the R2 and R3, a smaller SUV and crossover vehicle. The R2 starts at just $45,000, and the smaller R3 is estimated to be priced lower than that.
Cheaper vehicles will be the key to attracting more buyers, considering that Rivan's cheapest vehicle starts at just under $70,000. With the cheaper R2 SUVs deliveres expected to begin in the first half of 2026, Rivian is closing in on expanding its customer base.
Rivian is the better EV stock
While both of these companies have their challenges, I've been impressed that Rivian's management seems to be taking cost-cutting measures seriously and has a long-term plan for bringing new, more affordable vehicles to market.
If the company achieves its gross profit goal in the fourth quarter, it'll be another step ahead of Lucid. With its shares having a price-to-sales ratio of about 3, compared to Lucid's 9.7, its stock looks comparatively cheaper as well.
