Here’s the Best Electric Vehicle Stock of 2024 (Hint: It’s Not Tesla)

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Tesla (NASDAQ:TSLA) stock has more than doubled this year, so value-focused investors might balk at the idea of buying it now. Yet, there’s more to the electric vehicle (EV) market than Tesla. With a little digging, you might uncover some compelling reasons to choose Rivian Automotive (NASDAQ:RIVN) for EV-industry exposure in 2024.

Granted, Rivian might not fit the textbook definition of a good value since the company doesn’t have a price-to-earnings (P/E) ratio. Yet, forward-thinking investors should put the textbook back on the shelf and consider the tailwinds that could put RIVN stock on the fast track in the coming year.

Resilient Rivian raises production forecast

Wall Street’s worrywarts may fret about slowing demand for EVs, but it appears that Rivian Automotive’s management isn’t overly concerned. In the automaker’s third-quarter shareholder letter, it raised its 2023 vehicle-production guidance by 2,000 to 54,000 units.

In contrast, rival EV manufacturer Lucid Group (NASDAQ:LCID) cut its full-year EV-production outlook from its prior prediction of over 10,000 units to a new range of 8,000 to 8,500 vehicles.

This evidently prompted Rivian Automotive CEO RJ Scaringe to declare, “I’m actually surprised to be honest at how much we’ve seen others pull back.”

Furthermore, Rivian reported a third-quarter earnings loss of $1.19 per share, beating the analysts’ consensus estimate of a loss of $1.31 per share. Rivian also produced 16,304 EVs in Q3 2023, more than twice the 7,363 units it produced in the year-earlier quarter.

All in all, Rivian Automotive appears to be on the right track despite the soft EV demand. The company now has a prolonged winning streak of quarterly earnings beats. Thus, maybe some by-the-book value investors can forgive Rivian for being unprofitable and not having a P/E ratio.

Big plans for an affordable EV

What can Rivian Automotive do to help close its profitability gap in the coming years? The answer is produce an EV that American buyers can afford. That’s easier said than done, but Rivian is up to the task.

Rivian’s R1T electric pickup truck is visually appealing and powerful, but it’s not cheap. U.S. consumers should expect to pay at least $70,000 if they’re in the market for an R1T.

However, that’s not the end of the story for Rivian Automotive. Tesla started the EV price war, but Rivian isn’t just going to let Tesla commandeer the market. Rivian reportedly plans to produce its upcoming R2 vehicle model at its second EV manufacturing plant, which will be located in Georgia.

The R2 is anticipated to have a starting price of $40,000 to $45,000, and Rivian Automotive reportedly plans to unveil it in 2024 and launch it in 2026. Thus, investors shouldn’t look for the R2 on the roadways tomorrow or next week, but they should understand that just the anticipation of an affordable EV model could catalyze RIVN stock in the coming quarters.

One thing Tesla doesn’t have

Tesla has a famous founder, Elon Musk, and wide brand-name recognition. One thing Tesla doesn’t have though is fleet-supply deals with an e-commerce juggernaut and a telecommunications giant.

As you may have already heard, Rivian Automotive has an arrangement to provide EVs for Amazon’s fleet. This deal bolstered Rivian’s revenue-raising potential and reputation.

However, some investors may have wondered whether Rivian Automotive’s deal with Amazon could prevent it from pursuing other high-profile fleet-electrification arrangements. As it turns out, Rivian answered that question decisively in December.

In a blockbuster news story, Rivian Automotive announced an agreement with none other than AT&T (NYSE:T) to provide EVs for its fleet. According to the press release, AT&T “expects to begin adding the Rivian Commercial Van and R1 vehicles to its fleet in early 2024.”

Dare to look beyond Tesla

Thus, Rivian’s deal with Amazon isn’t preventing it from pursuing other big-ticket deals. As AT&T seeks to achieve carbon neutrality, what other large-cap businesses might turn to Rivian Automotive to help electrify their work vans and trucks?

It’s an intriguing question that prospective investors should consider. Frankly, Musk’s personality might be off-putting to some businesses. Meanwhile, Rivian Automotive is more than happy to accommodate the needs of famous, capital-rich collaborators.

This isn’t a call for investors to dump their Tesla shares. Rather, it’s what Tesla’s biggest fans might consider an indecent proposal: give a non-Tesla EV maker a chance as RIVN stock could fly surprisingly high in 2024.

Disclaimer: All investments involve risk. In no way should this article be taken as investment advice or constitute responsibility for investment gains or losses. The information in this report should not be relied upon for investment decisions. All investors must conduct their own due diligence and consult their own investment advisors in making trading decisions.