Rivian Automotive (RIVN -2.11%) is one of the most exciting electric car stocks today. Over the next few years, its growth should explode higher thanks to the introduction of new, lower-priced models. But if you think the market is already pricing in this growth, think again. Rivian stock is far cheaper than you might suspect.
Rivian's financials are about to improve greatly
Next year, everything will change for Rivian. That's because the company's new, lower priced R2 model is expected to begin production in early 2026. This will be Rivian's first vehicle priced under $50,000. Two additional vehicles under that price point -- the R3 and R3X -- are expected to launch soon after the R2 begins production.
When Tesla launched its first affordable models -- the Model 3 and Model Y -- sales doubled, then tripled in the years that followed. Profits also improved dramatically due to greater economies of scale.
Image source: Getty Images.
As the charts below highlight, Rivian is now expected to surpass Tesla in near-term sales growth. Given several expected model introductions in 2026 and 2027, it's reasonable to expect Rivian to best Tesla's sales growth for several years to come.
Rivian's gross margins are also now on par with Tesla's, though its profit margins remain negative. But that could change in the next few years when the company starts scaling sales for its mass market vehicles.
RIVN PS Ratio data by YCharts
Despite its exciting future, Rivian stock remains priced at a steep discount to Tesla shares. On a price-to-sales basis, shares trade at a discount of roughly 75%. There is still a lot of execution risk ahead. Plus, Rivian's access to capital is significantly limited compared to Tesla's -- a huge disadvantage in a capital-intensive industry.
But with a $15 billion market capitalization, improving margins and sales growth, and a relatively cheap valuation, Rivian stock remains far from overpriced.
