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Rivian is moving up on the IPO, but those 3 EV stocks are better to buy now

Rivian Automotive (NASDAQ: RIVN) hit the market with a bang, trading more than 30% above its IPO price, and now has a market c – of nearly $ 100 billion. This is despite the fact that only around 15 vehicles are currently being produced per week. The company has a bright future, but investors looking for value in electric vehicle stocks should probably look elsewhere now.

Think three of our Fool.com contributors, Travis Hoium, Howard Smith, and Daniel Foelber General Motors (NYSE: GM), ChargePoint inventory (NYSE: CHPT), and Clear group (NASDAQ: LCID) are all better buys than Rivian today.

Image source: Getty Images.

The market leader in autonomous driving

Travis Hoium (General Motors): With companies like Rivian making all the headlines in electric vehicles, General Motors is quietly building technology and manufacturing c -abilities to move fully to electric vehicles by 2035. This includes 30 electric vehicles that will hit the market worldwide by 2025, including cars, trucks and SUVs.

But it’s not GM’s EV c -acity that makes it a better buy than Rivian, it’s the company’s controlling stake in Cruise, the autonomous ridesharing company, that offers the greatest advantage. GM is providing Cruise design and manufacturing c -abilities to build autonomous vehicles such as the Cruise Origin (see above), a self-driving ridesharing shuttle that is part of a partnership between Cruise, GM and. was developed Honda. Cruise develops hardware and software for autonomous driving, which are incorporated into Origin and ultimately into a rideshare. GM is also providing funding to expand Cruise’s vehicle infrastructure, which could cost many billions of dollars, starting with a $ 5 billion line of credit to purchase Cruise Origins.

Over time, autonomous vehicles could reduce travel costs in cities and even eliminate the need for vehicle ownership. Cruise is a leader in this market and that gives GM tremendous advantages. This may be an old company in the auto industry, but it is taking great strategic strides to be a leader in the future of electric and autonomous vehicles.

Pickaxes and Shovels

Howard Smith (ChargePoint stocks): Rivian’s public debut caused a lot of buzz for good reason. The company has great supporters and reportedly a backlog for both fleets and electric vehicles (EVs). However, investors have seen many examples where the initial excitement leads to a rise in valuations that doesn’t always last.

Another exciting event recently for EV investors was the passage of a federal infrastructure bill that will allocate $ 7.5 billion to build the charging infrastructure this country needs to expand electric vehicle ownership. ChargePoint Holdings is a leader in this field with more than 118,000 charging ports, including more than 3,700 DC quick chargers. The vast majority of these stations are in the US, but the company is also expanding its business in Europe, where it already has 5,400 charging stations.

These federal infrastructure funds will be sent to states that will give grants to the charging companies that will make up the country’s network. And that should be a big hit for ChargePoint as the largest operator in the country. Even before this catalyst was realized, ChargePoint was growing its business beyond what it predicted before its public debut.

The company had sales of $ 146 million for the full fiscal year 2021 ended January 31, 2021, $ 225 million to $ 235 million. In the middle, this would correspond to annual sales growth of 57.5%, even without the additional catalyst from federal funds.

ChargePoint caused a stir last year when it announced it would trade publicly. The share is almost 50% below the high it hit at the end of December 2020 before the merger with the Zweckerwerbsgesellschaft (SPAC) that brought it public was completed. It wouldn’t be surprising if Rivian’s stock fluctuates too. But for Rivian – and all other manufacturers of electric vehicles – to be successful, a charging infrastructure must be in place. This makes ChargePoint an investment for the fast growing EV sector. That might make it a better investment today than fueling Rivian’s early hype.

Lucid proves it can compete with the best in the business

Daniel Foelber (Lucid Group): Rivian’s market c – of around $ 120 billion raises eyebrows considering the company is relatively unproven. Similarly, Lucid Motors has received its fair share of criticism for reaching a market c – of $ 65 billion in just over a month in mass production of its Lucid Air Dream Edition luxury sedan.

Rivian and Lucid are pricey, and it’s hard to say which one is now better value for money. Rivian received support from Amazon and ford as it targets the high end electric lifestyle truck and electric delivery truck markets. Similar to Tesla (NASDAQ: TSLA), the company bypasses the dealership framework of traditional automakers by marketing directly to consumers. Rivian also plans to build its own charging network to make electricity more accessible in remote locations where a core portion of its outdoor-facing audience requires the ability to charge. In comparison, Lucid doesn’t feel the need to invest in its own charging network, but instead chooses to save money by partnering with the growing list of third-party charging providers.

Rivian is already struggling with delivery delays due to the global shortage of chips. In comparison, Lucid has quickly built a reputation for delivering on its promises and meeting all of its key goals for 2021 on time. Lucid also has an excellent management team and lots of cash to fund its operations in 2022.

Arguably the best reason there has never been a better time to buy Lucid stock is because the company has incredible engineering skills that can rival Tesla – the undisputed champion in the electric vehicle industry. Packing in more battery cells can help improve performance, but Lucid doesn’t. Instead, a compact battery pack was built that has a battery efficiency of 4.5 miles per kilowatt hour (mi / kWh) of stored energy, which is higher than the Tesla Model S, Jaguar I-Pace, Porsche Taycan and other competitors. Lucid management believes that battery efficiency is the key differentiator, not just increased performance and range. With the Lucid Air Dream Edition and Grand Touring, it has outperformed the competition in both efficiency and performance – albeit at a steep price.

Rivian supporters would argue that not only does Rivian have a good head start in the lifestyle electric vehicle market, but it will also be a relatively isolated market with seasoned automakers like Ford and GM only challenging the standard pickup market (for now.) . ). In comparison, Lucid plans to bring lower-priced features of its sedan on the market that will have to compete with expensive but much more “affordable” luxury sedans. With this, the company wants to lower the horsepower and range of its cars in order to close the g – between its advantages and the competition. What gives Lucid an edge over Rivian, however, is that it has proven it can compete with the best in the business, meet its goals, and have plans for r -id growth in 2022 and beyond.

With the growth path m -ped out, Lucid has a clear path to even greater success. However, investors should be aware that Lucid stock is likely to remain extremely volatile as the company works toward scaling production.

Electric cars are here to stay

We all agree: electric vehicles will remain. They are now competitive with fossil fuel vehicles, costs are coming down, and the innovative companies that make electric vehicles are also enabling autonomy. The entire EV space has huge potential; we just think GM, ChargePoint, and Lucid are better buys than Rivian at today’s price.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, h -pier, and richer.

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