Rivian (RIVN 1.30%) and Lucid (LCID -2.17%) were both hot electric vehicle (EV) stocks. Rivian went public with an IPO price of $78 on Nov. 10, 2021, and its shares more than doubled to a record closing price of $172.01 just a week later. Lucid went public by merging with a special purpose acquisition company (SPAC) on July 26, 2021. Its shares started trading at $25.24, and more than doubled to a record closing price of $55.52 four months later.
Both companies initially attracted a stampede of bulls with their ambitious growth targets, and the buying frenzy in emotion-driven meme stocks amplified their gains. But today, Rivian and Lucid trade at about $13 and $3, respectively. Both stocks fizzled out as they missed their own goals and racked up steep losses. Rising rates also popped their bubbly valuations.
A Rivian R2 SUV. Image source: Rivian.
But when interest rates declined in 2024, Rivian and Lucid didn't bounce back even as investors pivoted back toward more speculative stocks. That sentiment is still chilly: Rivian's stock has only risen 5% since the beginning of 2025, while Lucid's stock dipped 3%. Should contrarian investors consider buying either of these EV stocks right now?
Why did Rivian and Lucid disappoint the market?
Rivian sells three EVs: its R1T pickup, its R1S full-size SUV, and an electric delivery van (EDV) for its top investor, Amazon (NASDAQ: AMZN), and other companies. Before it went public, it claimed it could produce 50,000 vehicles in 2022. But in reality, it only produced 24,337 vehicles that year as it grappled with supply chain disruptions.
Lucid sells two vehicles: its Air sedan and its new Gravity SUV. In its pre-merger presentation, it claimed it could deliver 20,000 vehicles in 2022. Unfortunately, it only delivered 4,369 vehicles in 2022 as it also struggled with supply chain constraints and production issues.
At their record highs, Rivian's market cap hit $153.3 billion, or 92 times its 2022 revenue; while Lucid's market cap reached $91.4 billion, which was 150 times its 2022 revenue. Those sky-high valuations set both stocks up for steep declines when they missed their own rosy forecasts.
What happened over the following years?
In 2023, Rivian more than doubled its production to 57,232 vehicles as it overcame its supply chain issues. But in 2024, its production dipped to 49,476 vehicles as rising rates chilled the EV market, it faced tougher competition, and it temporarily shut down its main Illinois plant to upgrade its production capabilities.
In 2025, it only expects to deliver 40,000 to 46,000 vehicles as it deals with higher tariffs on its raw materials and batteries, ongoing supply chain challenges, and another temporary shutdown to prepare for the launch of its smaller R2 SUV in 2026. Rivian is dealing with a lot of growing pains, but it's still supported by Amazon, Porsche (OTC: POAHY), Saudi Arabian conglomerate Abdul Latif Jameel, and other big investors. It ended its latest quarter with $8.5 billion in liquidity, and it expects the rollout of its smaller R2 SUV to significantly boost its sales and profits as it reaches a broader range of customers.
Lucid's deliveries rose to 6,001 vehicles in 2023 and 10,241 vehicles in 2024, but those numbers were dismal compared to its original estimates. Lucid faced many of the same macro and competitive challenges as Rivian, and its CEO, Peter Rawlinson -- who attracted a lot of attention for his previous stint as Tesla's (NASDAQ: TSLA) chief vehicle engineer -- stepped down this February. Its board still hasn't appointed a permanent CEO yet. Rivian's founder and CEO, RJ Scaringe, remains in charge of his company.
Lucid claims it can more than double its production to 20,000 vehicles this year as it ramps up its production of the Gravity SUV, but it doesn't have a great track record of meeting its own expectations. Yet Lucid is still firmly backed by Saudi Arabia's sovereign Public Investment Fund (PIF), which owns nearly two-thirds of its shares, and it ended its latest quarter with about $5.7 billion in liquidity, which it claims can carry it through its launch of the Gravity SUV.
Which stock has more upside potential?
From 2024 to 2027, analysts expect Rivian's revenue to grow at a compound annual growth rate (CAGR) of 32% as Lucid's revenue rises at a CAGR of 85%. Based on those estimates, which we should take with a grain of salt, Rivian and Lucid trade at 3.2 times and 6.9 times this year's sales, respectively. Neither company is expected to come close to breaking even, but Rivian's gross margins turned positive over the past two quarters as economies of scale kicked in. Lucid's gross margins are still negative.
Rivian's higher production rates, healthier gross margins, and more stable leadership make it a stronger investment than Lucid right now -- even if its production wanes ahead of the R2's launch. As for Lucid, I'm not sure it can successfully ramp up its production of the Gravity and meet Wall Street's high expectations. If it falls short of that goal, its valuations will decline and its stock will drop even further.
