It’ll be a busy couple of weeks for investors in Rivian (RIVN -2.16%) and Lucid (LCID +0.76%), as both companies are due to report second-quarter earnings.
Both have released preliminary delivery results, giving investors a peek at what to expect. Let’s have a look at these electric-vehicle pure plays and see which is the better long-term buy.
Today’s Change
(-2.16%) $-0.36
Current Price
$16.33
Key Data Points
Market Cap
Day’s Range
$16.14 – $16.93
52wk Range
$11.57 – $22.69
Volume
18.5M
Avg Vol
35.2M
Gross Margin
-441.39%
Rivian on a roll?
Rivian reported it delivered 12,194 vehicles in the second quarter, a substantial increase from 10,661 a year ago. It also produced another 12,613 cars at its Illinois plant. Management raised its full-year delivery guidance to 65,000-70,000 EVs.
Investments and partnerships from Volkswagen and Uber also help Rivian’s bottom line and future revenue prospects. Successful testing led to a $1 billion investment from Volkswagen last quarter. The Uber partnership should yield up to 50,000 fully autonomous robotaxis. Furthermore, Rivian’s software and services division is already profitable and is narrowing the automotive division’s losses.
Still, the stock is down more than 16% year to date and has lost more than 80% of its all-time value. Rivian is trading at about 3.6 times its sales.
Image source: The Motley Fool.
Lucid is shaking things up
Lucid isn’t as large a company as Rivian, but it’s still gaining traction and increasing its deliveries and production. The company delivered 3,953 vehicles, a 20% year-over-year increase, while producing 4,774 more vehicles in Q2.
Lucid has had a few hiccups lately, including a seat supplier issue that delayed deliveries and a sweeping change in executive leadership. The company now has a new CEO, CTO, CFO, and chief customer officer. The new CEO, Silvio Napoli, is aiming to simplify the business and organization.
Lucid’s stock has been badly beaten down. Shares have declined more than 90% in the past five years.
Today’s Change
(0.76%) $0.06
Current Price
$7.96
Key Data Points
Market Cap
Day’s Range
$7.54 – $8.20
52wk Range
$2.37 – $25.30
Volume
16.7M
Avg Vol
19.4M
Gross Margin
-9560.18%
Which is the better buy now?
Both Rivian and Lucid remain unprofitable, but right now, Rivian is the stronger company and a buy for long-term investors. Lucid’s stock is inexpensive, but Rivian is showing it can execute at scale and has a clear roadmap.
The successful launch of the R2 fleet that moves the company into a more mainstream market, along with an expanding manufacturing capacity, a robotaxi partnership with Uber, and even a connectivity deal with AT&T, are all levers for growth.
Lucid simply has more headwinds than Rivian at this point. The company is facing a class action lawsuit in addition to its operational challenges. This adds considerable pressure on the company and poses a significant reputational risk.
Rivian has more cash, giving it a longer runway. Lucid absolutely has upside potential, but it’s more speculative and has greater execution risk. Rivian’s diversified offerings, including consumer EVs, commercial contracts, and technology licensing, give it a competitive advantage.