Many electric vehicle (EV) companies promised to challenge the industry's established leaders. Lucid Group (LCID 6.83%) went public in July 2021 , before it had begun meaningful commercial vehicle deliveries. Yet investors were willing to value the company based mainly on its ambitious future production targets.
The Amazon- and Ford-backed Rivian (RIVN 6.49%) also reached a market capitalization of $100 billion for a brief time after its November 2021 initial public offering. For a period, these companies were valued as if rapid scaling, expanding margins, and easy access to capital were assured.
Image source: Getty Images.
However, the environment has changed in 2026. Lucid and Rivian stocks are under pressure.
Growth without profitability
Lucid delivered 15,841 vehicles in 2025, up roughly 55% year over year. The company expects to deliver 25,000 to 27,000 vehicles in 2026.
NASDAQ: LCID
Key Data Points
Despite this growth trajectory, Lucid reported a net loss of $2.7 billion in fiscal 2025. It also generated negative free cash flow of around $3.8 billion in fiscal 2025, highlighting the heavy cash burn required to ramp up production capacity. Higher deliveries have not yet translated into positive free cash flows or sustainable margins.
Rivian delivered 42,247 vehicles in fiscal 2025 and expects to deliver 62,000 to 67,000 cars in fiscal 2026.
NASDAQ: RIVN
Key Data Points
While the company achieved its first full year of positive gross profit, it has still posted a net loss of $3.6 billion and negative free cash flow of $2.5 billion for fiscal 2025. Management expects negative adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and capital expenditures in the range of $1.95 billion to $2.05 billion in fiscal 2026. Hence, while the company's operational progress is visible, Rivian is still highly loss-making.
A better pick
Instead of picking stakes in loss-making EV companies, investors can consider taking a position in EV giant Tesla (TSLA 2.56%).
NASDAQ: TSLA
Key Data Points
Tesla has both scale and financial strength. In fiscal 2025 , the company generated revenues of $94.8 billion and non-GAAP (adjusted) profit of roughly $5.8 billion, despite pricing pressure and a softer EV market. That profitability is helping drive Tesla's growth strategy.
A key part of this strategy is autonomous driving. Management has highlighted plans to expand robotaxi operations into seven additional U.S. cities -- Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas -- in the first half of 2026. If executed successfully, this rollout would expand the company's target addressable market while also positioning autonomy as a viable business at scale. In fact, Wolfe Research analyst Emmanuel Rosner expects Tesla's robotaxi business to reach $250 billion in revenues by 2035.
Tesla currently offers its Full Self-Driving (FSD) software as a $99-per-month subscription service. This shift will add a recurring revenue stream and reduce the company's dependence on one-time upgrades. With 1.1 million paid FSD customers, Tesla is collecting real-world driving data from millions of vehicles, which further trains and strengthens its autonomous driving capabilities. Tesla CEO Elon Musk's compensation package also includes incentives for Tesla reaching 10 million active FSD subscriptions. This highlights the crucial role autonomy adoption plays in the company's future strategy.
Tesla's energy segment is also proving to be a significant growth catalyst. The company deployed 46.7 gigawatt-hours of energy storage in fiscal 2025, up 48% year over year. The company's energy revenues were up nearly 27% year over year to $12.8 billion in fiscal 2025. With Tesla investing almost $200 million to expand production of its Megapack utility-scale energy storage product, the company stands to benefit from rising demand for large-scale energy storage across electricity grids and data centers.
Beyond autonomy and energy storage, Tesla is designing its own artificial intelligence (AI) chips, building out its compute infrastructure, and expanding in-house training capabilities to support FSD development. The company is also integrating autonomy software directly into the vehicles. By reducing its reliance on third-party suppliers, the company can quickly upgrade its autonomous driving features to protect margins in a competitive pricing environment.
Tesla is also advancing its Optimus humanoid robot program. Management has indicated that Optimus is designed to perform repetitive and labour-intensive tasks initially for the company's own factories. Over time, the company also sees it as a long-term revenue driver.
Finally, Tesla is funding these initiatives primarily with its own profits and operating cash flows. Smaller EV players such as Lucid and Rivian depend on external funding, such as debt or equity dilution. That distinction matters in a capital-intensive industry where manufacturing scale, battery supply, and AI infrastructure require sustained investments.
Valuation
Tesla trades at 16.2 times sales, which is not cheap compared to traditional automakers. However, Tesla is not just a car manufacturer. Besides selling vehicles, the company also has a subscription-based software business and a rapidly growing energy storage business, and it stands to benefit from potential advances in its autonomy and robotics offerings.
However, investors should also be aware of risks such as increasing regulatory scrutiny for autonomy, intensifying competitive pressures, and EV pricing dynamics. The company's high valuation multiple leaves little room for execution errors.
Yet the combination of scale, profitability, recurring software revenues, energy growth, and AI investments differentiates Tesla from EV peers such as Lucid and Rivian.
For investors who can ignore short-term volatility, Tesla remains a monster long-term EV leader.
