Tesla vs Rivian: Which Will Be the Better Electric Vehicle Stock to Own in 2025?

As we step into 2025, the electric vehicle (EV) market is heating up, with Tesla (TSLA) and Rivian (RIVN) leading the charge. But which of these two powerhouses will be the better stock to own in the coming year? Let's dive into the data and analyze their strengths, weaknesses, and potential catalysts to make an informed decision.



Tesla: The Established Giant

Tesla has been the undisputed leader in the EV market for years, with a massive global presence and a loyal fan base. In 2024, despite facing stiffer competition and sales pressures in China and Europe, Tesla's stock skyrocketed higher, partly due to its late run following the election win from Donald Trump and its autonomous driving robotaxi ambitions.

Tesla's autonomous driving technology is a significant catalyst for its stock, as investors see the potential for a low-cost, fully autonomous vehicle to disrupt the market. However, Tesla still faces challenges, such as production scaling, technological advancements, and regulatory hurdles.



Rivian: The Niche Player with Big Ambitions

Rivian, on the other hand, is a newcomer to the EV market, focusing on SUVs and trucks for adventure and commercial customers. Despite production constraints and component shortage issues in 2024, Rivian managed to deliver 51,579 vehicles, up from 3% in 2023. Rivian's shares finished the year much lower, down about 43%, indicating that investors were not as optimistic about the company's prospects as they were about Tesla's.

However, Rivian made strategic moves in 2024 to improve its production capabilities and gross margins, which are expected to positively impact its stock performance in 2025. By upgrading its tooling, switching to lower-cost LFP batteries, introducing the R2 SUV, and forming a significant investment and partnership with Volkswagen, Rivian is positioning itself for growth and potential outperformance in the coming year.



The Verdict: Which Stock to Own in 2025?

Both Tesla and Rivian have their strengths and weaknesses, and their stock performance will depend on various factors in 2025. Tesla's autonomous driving ambitions and established market dominance make it an attractive choice for investors looking for long-term growth and stability. However, Rivian's strategic moves to improve production capabilities and gross margins, combined with its niche market focus, could lead to significant growth and outperformance in the coming year.

Ultimately, the choice between Tesla and Rivian will depend on your investment goals, risk tolerance, and time horizon. If you're looking for a more established, long-term play, Tesla might be the better choice. However, if you're willing to take on more risk for potentially higher returns, Rivian could be the way to go. Keep an eye on both companies' progress and make an informed decision based on their performance and developments throughout the year.