Electric vehicles accounted for 8.6% of all passenger vehicles sold in 2021, but Tesla (TSLA +0.23%) still dominates the conversation around EVs. As the industry moves closer and closer to mass adoption, there are some companies that have both the products and growth capacity to potentially be much better investments than Tesla.
Rivian (RIVN 0.85%) is quickly ramping production of its trucks and SUVs, Proterra (PTRA +0.00%) is making components for the industrial market, and General Motors (GM +1.19%) is already one of the biggest EV manufacturers in the world. Don't sleep on these companies as potentially great electric vehicle investments.
Image source: Rivian.
The upstart
Rivian has had a rough beginning as a public company, but now may be the time to start getting interested in the automaker. Rivian has said it will only produce about 25,000 vehicles this year because of supply constraints, but it's already building a new plant in Georgia that will bring total production capacity to about 750,000 vehicles by the end of the decade.
What separates Rivian is the company's products, which are aimed squarely at the large vehicle market, an area that has so far been underserved by Tesla and other early competitors. The R1T truck was the first product to launch and the R1S SUV is now in production. In addition, the company has a contract with Amazon to supply 100,000 electric delivery trucks.
It's hard to value Rivian based on early financial results because the company is still losing money, but consider that Rivian had $17 billion in cash on the balance sheet as of the end of March 2021 and a market cap of just $24 billion today. If positive early reviews of the company's trucks hold and the company can improve production capacity and efficiency, Rivian could carve out a profitable position in the EV space for years to come.
The industrialist
Proterra isn't a household name in EVs, but it is providing products critical to bringing industry into the electric revolution. It is an electric bus manufacturer, but the bigger potential for the business is supplying battery and drivetrain products to other industrial manufacturers. We could see Proterra products powering delivery trucks, backhoes, cranes, bulldozers, and more.
You can see below that the business isn't profitable yet, but it has a lot of potential as industrial clients move toward electrification. And with $599 million in cash and investments on the balance sheet, it likely has the money to fund operations for a couple of years without raising funds.
PTRA Revenue (TTM) data by YCharts
I think Proterra will play a key role in lots of industrial products going electric. Not every company will want to become an expert in batteries and electric motors, they'll just want to produce the products they make best. Like engine manufacturers in today's industrial space, there's a role for drivetrain specialists in industry, and Proterra can fill that role long-term.
The incumbent
General Motors says it will move to zero-emissions vehicles by 2035 and is making big strides in expanding electric vehicle production today. The Chevy Bolt was GM's first big foray into EVs, but an electric Silverado, Hummer, and Cadillac Lyriq are all moving toward production. Lyriq specifically has seen pre-orders for 2023 sell out, and the company is already taking orders for 2024.
On top of the EVs GM will be selling to customers, it's building the Cruise Origin, an electric autonomous ridesharing vehicle that could upend transportation. If someday we're riding around in autonomous vehicles rather than the cars in our driveway, GM is positioned to be part of that disruption.
While GM may be a decade behind Tesla in EVs, it's bigger, more profitable, and much cheaper for investors. This may be an incumbent to bet on in the EV space.
GM Revenue (TTM) data by YCharts.
There will be multiple winners in electric vehicles
The EV market is going to be big, and one company can't dominate the entire supply chain. It's likely niches will form, and I think Rivian, Proterra, and GM have big roles to play in the future of electric vehicles.
