While the U.S. electric vehicle (EV) market has accelerated more slowly off the line than predicted, the future is still almost certainly headed in that direction. Finding the right EV makers and holding them long term could prove lucrative for investors, but picking the right EV maker is easier said than done. We'll take a quick look at why there might be an upcoming buying opportunity for savvy investors.
A buying opportunity
For consumers, you can expect serious discounts and incentives on EVs through the end of September, when the $7,500 federal tax credit on EV purchases officially ends.
That means there's a "pull-through" of demand from consumers rushing in to buy before the credit is gone. As wonderful as that will be for EV makers during the third quarter, it sets up a whiplash when an equally strong lull in demand will follow during the fourth quarter, and it may take months to normalize.
With a rough fourth quarter in store for the EV industry, it could provide a buying opportunity -- but which EV makers deserve your investment?
Buy this: Rivian
If you had to pick one EV maker that will be impacted less by the fourth-quarter slowdown, it would likely be Rivian (RIVN -1.21%). That's simply because the automaker has no vehicle launches in 2025 and has already seen softening demand for its R1 vehicles. On the flip side of that scenario is Lucid, which recently launched its Gravity SUV EV and is just beginning to accelerate production right as the slowdown hits -- simply unfortunate timing.
Rivian's R1S. Image source: Rivian.
That said, Rivian has positioned itself to take a big step forward when it launches its highly anticipated R2 SUV in the first half of 2026, followed later by the R3 and R3X. It's going to be absolutely crucial to the automaker's near term for a couple of reasons.
First, Rivian focused on significantly reducing the cost to produce the R2 compared to its flagship R1 line of vehicles. Rivian removed half of the bill of materials (BOM) and developed a new streamlined manufacturing process with new die-casting methods, among other things.
Second, in part because of all those cost reductions and process improvements, the R2 starting price will be around $45,000, tens of thousands of dollars cheaper than its R1 predecessors. This will significantly open the door to a more mainstream U.S. consumer. 2026 is setting up to be a much more lucrative year for Rivian, and the U.S. EV market should be recovered just in time for the EV maker to ramp up production of the critically important R2.
Not that: VinFast Auto
VinFast Auto (VFS -1.92%) was an intriguing EV investment that had massive upside if it could expand from its home market of Vietnam, which it dominates, into the U.S. and Europe. Unfortunately, the EV swung for the fences with an expensive expansion plan, and struck out.
Now the company is dialing back its global ambitions, focusing on Asian markets, and seems in need of new capital after its founder and CEO Pham Nhat Vuong pledged another $1.5 billion to the automaker in exchange for R&D assets.
NASDAQ: VFS
Key Data Points
In part due to its global expansion attempt, the Vietnamese EV maker reported a net loss of $812 million for the second quarter, an increase of 15% from the prior year.
The numbers don't get better, either, as a large 172% surge in vehicle deliveries during the quarter drove a much more modest 91% gain in revenue, suggesting pricing weakness. Further, despite the large 172% surge in second-quarter deliveries, the company's first half total reached only 72,167 vehicles, a pace that will fall far short of its annual target of 200,000 units.
VinFast has so far failed to break the code of U.S. or European markets, is bleeding cash, and might be limited to its Vietnam market, which wouldn't provide investors enough growth for the risk of owning the stock. On the flipside, while Rivian's stock has been stuck in the mud this year, next year is setting up to be a big one for the automaker, and the fourth quarter just might bring you a buying opportunity to start a small position.
