Rivian (NASDAQ:RIVN) and Nicola (NASDAQ:NKLA) were once two of the most popular electric vehicle stocks on the market. Rivian went public in November 2021, and one week later it soared from its IPO price of $78 to a record high of $172.01. Nikola went public in June 2020 by merging with a special acquisition purpose company (SPAC), and the combined company's stock price opened at $37.55 on the first day of trading, more than doubling to an all-time high of $79.73 a week later. Rose.
But now Rivian's stock is trading at about $9, making Nikola's stock worth less than $1. Mr. Nicola recently even proposed a reverse stock split that would raise his stock price above the $1 threshold to avoid the risk of delisting.
Both EV companies were running out of steam after failing to meet their initial production goals, racking up huge losses and burning through large amounts of cash. But can either of these unloved EV makers recover in the next few years?
Difference between Rivian and Nikola
Rivian currently sells the R1T pickup, R1S SUV, and custom electric delivery vans for top investors. Amazon (NASDAQ:AMZN). The company plans to begin mass production of the lower-end R2 SUV at the end of 2026, followed by the rollout of the sportier R3 and R3X SUVs in late 2026 or early 2027. The company needs to deliver 100,000 electric delivery vans to Amazon by 2030.
Nikola makes battery-powered and hydrogen-powered electric semi-trucks. Initially, the company only sold battery-powered trucks (BEVs), but last year it launched its first hydrogen fuel cell truck (FCEV). The company is also building a network of hydrogen charging stations through a partnership with EV charging infrastructure company Voltera.
Rivian initially received a lot of attention because it was backed by Amazon. ford. Ford has since liquidated most of its Rivian stock, but Amazon remains its biggest backer.
Nikola didn't have the backing of peer technology companies or auto giants, and suffered a shocking setback after its public launch. The company's founder and former CEO, Trevor Milton, was convicted of securities fraud and wire fraud in October 2022, and last year he was forced to stop selling BEVs after several of his trucks caught fire. There was a pause. Last year, the company sought to strengthen its liquidity by diluting shareholders by roughly doubling its number of shares so it could raise more cash through a stock offering. Although Rivian faced some safety-related recalls, it did not face as many survival issues as Nikola.
Which EV manufacturers are producing more vehicles?
When Rivian went public, it expected to produce 50,000 vehicles in 2022, but faced supply chain constraints and ultimately cut that forecast in half to 25,000, bringing full-year production to 2. The number remained at 4,337 units.
In 2023, Rivian overcame supply chain issues and produced 57,232 vehicles. Part of this acceleration comes from our in-house Enduro drive unit, reducing production costs and reliance on third-party components. But as it faces macro headwinds, intense competition from other EV manufacturers, and the closure of its flagship plant in Illinois for “several weeks” to streamline production and integrate new technology, Production is expected to remain at around 57,000 units.
Analysts expect Rivian's revenue to rise 11% to $4.9 billion in 2024, with net losses narrowing to $4.6 billion from $5.4 billion. Although the company is expected to remain in the red for the time being, it aims to return to a positive gross profit margin by the fourth quarter of this year. The company still has nearly $10.5 billion in total liquidity at the end of 2023 and a reasonable debt-to-equity ratio of 0.8, giving it plenty of room to raise new cash.
Before going public, Nikola announced that it would be able to deliver 600 BEVs in 2021, 1,200 BEVs in 2022, and 3,500 BEVs in 2023. There was also a plan to deliver 2,000 FCEVs in 2023. However, in reality, Nikola did not deliver any cars in 2021. In 2022, only 131 BEVs were delivered. In 2023, it delivered only 114 trucks, of which 35 were FCEVs.
Analysts expect 2024 revenue to more than quadruple to $170 million as Nikola's net loss narrows from $966 million to $470 million, but that target To achieve this, it is necessary to significantly increase the amount delivered. This may be difficult considering it ended 2023 with just $465 million in unrestricted cash. However, the company's debt-to-equity ratio of 0.8 (lowered by doubling its share count) may give it some room to raise new cash through new debt issuance.
Clear winner: Rivian
With Rivian and Nikola trading at just two and six times this year's sales, respectively, both EV stocks look cheap. But Rivian's higher production rates, clearer future roadmap, and stronger balance sheet all make it a much better buy than Nikola, which has disappointed investors time and again with poor production rates and quality control issues. It is a material. Amazon's decision to stick with Rivian as other investors flee also suggests the company's downside is limited.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Leo Sun has a position at Amazon. The Motley Fool owns a position in and recommends Amazon. The Motley Fool has a disclosure policy.
Better EV Stocks: Rivian Automotive vs. Nikola Corporation was originally published by The Motley Fool
