Title: Top EV Pick for a $500 Investment Today
Hop on the electric vehicle (EV) bandwagon without setting your sights solely on Tesla. If you're intrigued by the EV market or just curious about alternative options, Rivian Automotive (RIVN) might be the perfect choice for investing your hard-earned $500.
Let me run down three reasons why I think this up-and-coming EV powerhouse could be one of the best stock picks to secure your stake in the electric future.
1. Big-Name Backing
Summertime is synonymous with fun in the sun – but for Rivian, it marked the launch of a significant partnership with the world's second-largest automaker, Volkswagen. This collaboration will give Volkswagen access to some of Rivian's innovative tech in exchange for an initial $1 billion and potential investments up to $5.8 billion by 2027.
But Volkswagen isn't alone in recognizing Rivian's potential. Early investor Amazon holds approximately 17% of the company and has already ordered 100,000 EV vans for delivery by 2030. The first 10,000 vans have already hit the road, giving Amazon a taste of what Rivian's got cooking.
2. Climbing Toward Profitability
Making vehicles is anything but easy, especially for EV startups. Rivian, like many of its competitors, is working overtime to launch new products and ramp up production while straining their wallets. But despite the heavy expenditure, Rivian's losses are narrowing.
In the Q3 of 2023, the company slashed its net losses to $1.1 billion, a decrease from $1.37 billion compared to the prior year. Some of that cost-cutting magic includes reworking vehicle wiring harnesses, streamlining battery production, and trimming 500 parts from Rivian's R1T pickup truck and R1S SUV, resulting in a 35% reduction in costs.
Rivian's budget-slashing efforts paired with strategic partnerships and significant investments put it on the path to profitability. Management is targeting modest gross profits by the end of Q4.
3. The Perfect Buying Opportunity
If you're down for the electric vehicle ride, now could be the perfect time to jump aboard. Shares of Rivian have taken a tumble, falling 34% over the past year. With such a significant dip, investing in Rivian right now could mean you're snagging shares at a sweet discount.
Rivian's share price-to-sales ratio currently hovers at 2.58, significantly lower than that of competitor Lucid's 6.7. While EV startups are bound to experience some market volatility, completing the electrified vehicle transition represents a lucrative payoff in the long run.
So, what are you waiting for? With intelligently curated backing, a promising move towards profitability, and a market that's backing up the truck, Rivian is setting itself up to be one of the best EV stocks on the block!
Given the current market situation and Rivian's financial progress, investing some of your finance into this electric vehicle company could potentially be a wise move for diversifying your money in the investing world. Considering Rivian's significant partnerships, such as the one with Volkswagen, and major investments from companies like Amazon, the potential growth of this up-and-coming EV manufacturer is quite promising.
