It's been a bumpy ride for many electric vehicle (EV) stocks over the past few years, and both Rivian Automotive (RIVN 0.92%) and Lucid Group (LCID 0.41%) have felt each jarring pothole. Rivian's shares have tumbled 79% and Lucid's have fallen 92% over the past three years.
If those declines 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 start-up 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 stock? Let's take a look.
Image source: Getty Images.
Lucid: Impressive vehicles, increasing losses
Lucid's high-end Air sedan has rightly impressed automotive enthusiasts. The Air won MotorTrend's 2022 Car of the Year in its very first model year and recently won the 2024 Best Luxury EV by Top Gear. The Air also recently made it on 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 does all of that matter? Because the automotive market is highly competitive, especially when it comes to EVs, and new start-ups need to make products that stand out. Lucid has accomplished this, but unfortunately it hasn't translated to impressive sales.
NASDAQ: LCID
Key Data Points
The company had just $200 million in revenue during the third quarter (ended Sept. 30), and its net losses 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, most importantly, lowering 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 the EV start-up making just 49,476 vehicles last year, down 13.5% from 2023. Meanwhile, deliveries only rose 3% to 51,579.
Thankfully, 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 should be watching this closely.
NASDAQ: RIVN
Key Data Points
The good news is that Rivian cut 35% of its cost of materials across its van, truck, and SUV production last year, 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 most recent quarter -- the company achieving its gross profit goal 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 it 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 even lower.
Cheaper vehicles will be the key to attracting more buyers, considering that Rivian's cheapest vehicle currently starts at just under $70,000. With the cheaper R2 SUV deliveries 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.
Just keep in mind that the electric vehicle industry still has a long road ahead and it's likely there will be significant share price swings ahead as EV start-ups navigate this nascent market.
