The electric vehicle (EV) revolution continues to unfold, but not every automaker is on equal footing. Furthermore, internal combustion engines still dominate the market. Investors looking to gain exposure to the future of transportation are often torn between growth-heavy start-ups like Rivian (RIVN +1.25%) and legacy automakers like Ford Motor Company (F 0.90%). Both have compelling narratives -- but only one stands out today as the better buy.
Let's break down the case for each.
Rivian: Ambitious growth, heavy costs
Rivian once captured investor imagination with its sleek trucks and Amazon-backed promise. Fast-forward to 2025, and the company remains a speculative play, albeit one that's secured a lifeline from Volkswagen (VWAGY 0.56%).
According to Rivian's first-quarter 2025 financials, the company posted a net loss of $541 million. This is a good improvement from the $1.44 billion lost in the first quarter of 2024, but continues its pattern of deep losses as it ramps up production. A good thing to mention is the shift from gross losses of $527 million in 2024 to a gross profit of $206 million in Q1 2025. Still, Rivian continues to struggle with cash burn and supply chain inefficiencies.
Image source: Getty Images.
The big bright spot for Rivian is its strategic partnership with Volkswagen, which includes a $5 billion investment and joint development of next-gen EV platforms. This alliance provides a much-needed vote of confidence and access to global scale. However, a major new factory planned under this deal is going to cost Rivian a lot of money and could take years to pay off.
Investors buying Rivian today are essentially betting that the company will not only survive but thrive after enduring years of costly expansion. It's a long runway -- but also a risky one.
Ford: A legacy auto that's built to last
Ford may not carry the same hype as Rivian, but it has things Rivian sorely lacks: scale, cash flow, and a dividend. Ford has put together four years in a row of solid revenue growth. Yes, annual net income is a bit up and down, but that's the nature of the car industry, especially when you've been pumping money into new things like EVs.
The company has leaned into EVs with its popular F-150 Lightning and Mustang Mach-E while still maintaining a strong lineup of internal combustion vehicles that provide steady income. Even more importantly, Ford assembles over 80% of its vehicles in the U.S., giving it a relative advantage in the face of rising tariffs under the Trump administration.
As reported by Yahoo! Finance, Ford expects to weather the tariff storm better than some of its rivals like General Motors, looking at a $2 billion (after offsetting $1 billion) bill versus higher estimates from GM. Still, Ford's business is not immune, since many of its parts are still sourced globally. But compared to start-ups and foreign automakers, Ford's domestic production base offers a meaningful cushion.
From a valuation standpoint, Ford looks attractive. Its stock trades at a modest multiple of 14 times earnings, and it offers a reliable dividend yield of around 5.43% -- something growth-hungry Rivian can't match. Plus, after selling most of its stake in Rivian last year, Ford has sharpened its focus on its own EV ambitions.
The better buy
There's no denying that Rivian has potential. Its alignment with Volkswagen is a meaningful endorsement, and its brand is resonating with younger, affluent buyers. But as of today, it remains a speculative investment, with a high burn rate and no profits in sight.
Ford, on the other hand, offers investors value, income, and relative geopolitical insulation relative to many competitors. While it too faces challenges -- especially from supply chain disruptions and legacy costs -- it's better positioned to ride out short-term volatility. And for investors looking to combine stability with EV upside, Ford is the more compelling pick.
NYSE: F
Key Data Points
Verdict: Ford is the better buy today. It might not make you filthy rich overnight, but the dividend and low price tag make it a safer and more appealing play within the auto industry.
