Key Points
Like many electric vehicle (EV) stocks, shares of Rivian Automotive (NASDAQ: RIVN) are down more than 15% since 2026 began. But soon, the company should start realizing several major growth catalysts.
If Rivian can execute on its upcoming growth catalysts, shares could explode in value. And given the company’s cheap valuation, it won’t be a surprise if Rivian becomes a true “once-in-a-decade” investment opportunity.
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But before you jump in, it’s important to understand the two growth catalysts in question.
1. Rivian is about to copy Tesla’s growth playbook
Tesla has a market cap well north of $1 trillion. How did it become one of the biggest companies in the world? The answer, at least in part, surprisingly concerns the launch of two models: the Model 3 and the Model Y.
Tesla launched the Model 3 in 2017. Model Y deliveries began in 2020. In 2017, Tesla had a market cap of around $50 billion. By 2020, the company’s valuation had surpassed $600 billion. In the following years, that valuation surpassed $1 trillion.
Today, more than 90% of Tesla’s automotive sales come from these two models. Sales are so successful, in fact, that Tesla axed two legacy models, the Model S and Model X, after 14 years of consecutive production.
Tesla’s valuation today includes many growth catalysts that aren’t related to car manufacturing. But one thing is clear: Launching affordable vehicles put the company’s growth on overdrive. This is exactly what Rivian hopes its R2 SUV — its first affordable model that should begin deliveries to customers soon — will generate.
Priced under $50,000, Rivian’s R2 model could eventually rival Tesla’s sales of both the Model 3 and Model Y. Many of the most popular vehicles in the world today are SUVs. And in recent years, Tesla has faced very limited competition from pure-play EV makers at the more affordable end of the market.
As with Tesla’s sales ramp-up, it may take a few years for Rivian’s production and demand to scale. But the upside potential is clear.
Image source: Rivian.
2. Rivian could become the next hot AI stock
SUVs are popular. But self-driving cars could prove even more popular. So popular, in fact, that they may spawn giant markets like the robotaxi market, which some experts believe will eventually be worth many trillions of dollars worldwide.
Right now, Rivian is investing aggressively in artificial intelligence (AI), a core technology that is advancing self-driving capabilities faster than ever before. Rivian is investing so heavily that it recently pushed out its profitability targets.
Rivian’s bet on AI and autonomous driving is already paying off. Earlier this year, Uber Technologies agreed to a $1.25 billion deal with Rivian. The deal calls for Uber to order up to 50,000 R2 SUVs from Rivian to power its own robotaxi division. In return, Uber will invest up to $1.25 billion in Rivian through 2031, subject to Rivian reaching certain autonomous performance milestones.
Despite rising AI investment and early validation from Uber — a $150 billion business — Rivian stock continues to trade at just 3.5 times sales. Tesla, for comparison, trades at an astounding 13.5 times sales.
To be clear, I don’t think Rivian stock should trade on par with Tesla stock. Tesla enjoys a huge capital and production capability edge. Plus, CEO Elon Musk is worthy of a stock price premium simply due to his reach and connections. But Rivian shares don’t deserve to trade at a 75% discount to Tesla. Expect that discount to narrow as R2 deliveries ramp up and Rivian’s AI ambitions gain more real-world traction.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
