Tesla, Inc. (NASDAQ:TSLA) and Rivian Automotive, Inc. (NASDAQ:RIVN) are both electric vehicle makers, and that is about the last thing they have in common. One is worth roughly $1.5 trillion. The other is worth about $22 billion.
Neither is priced on the cars. Tesla trades at a multiple no carmaker has ever justified, because investors are paying for robotaxis and robots rather than deliveries. Rivian is priced as a company that has to prove it can survive.
Tesla shares are down about 14% this year. Rivian sits closer to the bottom of its twelve-month range than the top.
READ ALSO: Rivian Automotive (RIVN) Is Catching Up to Tesla (TSLA)’s Self-Driving Tech, But Tesla Still Leads
A Tesla car. Photo from Tesla website
Rivian Finally Has a Date Attached to its Turnaround:
For years, the Rivian argument was a promise. It now has a deadline.
Management has told investors it expects the automotive side to be making a gross profit by the end of this year. That is the moment a carmaker stops losing money on each vehicle it builds. The wider company already clears that bar, helped by software and services, but the cars themselves do not yet.
The R2 has helped. Rivian’s smaller and cheaper SUV has drawn demand ahead of what the company expected, which matters more than any single quarter of deliveries. The R1 was always a niche product at its price. The R2 is the one that has to work.
Its technology is not far behind either. Rivian has been closing the gap on Tesla’s self-driving software, though Tesla still leads.
DON’T MISS: Tesla’s (TSLA) Margins Broke in a Way Deliveries Can’t Fix
Tesla Funds Itself and Rivian Does Not:
Here is the problem with the Rivian case. It lost more than $3 billion over the past year on under $6 billion of revenue. The losses are larger than half of what it sells.
A company in that position depends on other people’s money. It has raised capital repeatedly, and every round has diluted the people who bought in earlier. Reaching positive gross profit is not the same as reaching profit, because it says nothing about the factories, the engineers, or the interest.
Quality niggles continue as well. Rivian recalled close to 99,000 vehicles on September 23 over a rearview camera fault, though the fix goes out over the air rather than through a workshop.
Tesla does not have the funding problem. Its spending has stepped up sharply and the most recent quarter consumed cash, but it sits on more than $40 billion and has still generated cash across the year so far. It pays for its factories, its chips and its robotics work without asking shareholders for more.
What Tesla does have is a price. At several hundred times earnings, the shares already assume the robotaxi and humanoid businesses arrive and work. Its automotive margins have also broken in a way deliveries alone cannot fix, which is why the stock has fallen while the story got louder.
Conclusion:
Rivian is the more interesting story, and the R2 gives it a genuine inflection with a date on it. However, it is losing more than half of its revenue, it has diluted shareholders to get here, and positive gross profit is a milestone rather than a finish line. Tesla is expensive to the point of absurdity on current earnings, but it pays for its own ambitions and does not need the market’s permission to keep going. On balance, Tesla is the better buy, because only one of these two controls its own funding. The number to watch is whether the automotive segment itself turns a gross profit when Rivian next reports.
Market Sentiment:
Tesla, Inc. was held by 116 hedge funds with a combined stake value of about $23.8 billion at the end of Q2 2026 in the Insider Monkey database, down from 123 holders in the previous quarter. Rivian Automotive, Inc. was held by 40 hedge funds with a combined stake value of about $1.7 billion, down from 45 holders in the previous quarter.
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This article is originally published at Insider Monkey.
