Why Tesla is a better EV than Rivian: Should you buy it or should you say goodbye?
Alonso Munoz, Chief Investment Officer at Hamilton Capital Partners, joins us on the latest edition of Good Buy or Goodbye to discuss the best and worst stocks in the electric vehicle industry. Munoz lists Tesla (TSLA) as a good buy, explaining that the company’s efforts in self-driving will be key to its next phase of growth. As other companies such as Waymo roll out their own robotaxis, Munoz believes Tesla has an edge over competitors because it has more data to train its vehicles. However, he points out possible regulatory and policy risks in the future. He also highlights Tesla’s improving financials and believes the company has “ample capital to deliver on its product roadmap.” He expects third-quarter deliveries to be between 460,000 and 470,000 units. Munoz points out that Tesla is “not just a car company.” He is bullish on the company’s energy business, highlighting its “explosive” revenue growth in the second quarter. “That excites us outside of just car sales. The auto industry has struggled over the last couple of years with the macro environment as well as rising interest rates. So the diversified business lines and the revenue there gets us very excited,” he explained. Meanwhile, Munoz is bearish on Rivian (RIVN), telling Yahoo Finance: “They need a lot of cash. It’s a scale industry, and just recently, this summer, they partnered with Volkswagen (VWAGY). They got $5 billion to roll out their next phase of growth, lower-priced cars. So that’s something we’re looking at. It’s an unprofitable business. They’re losing money on every car they make, and we’re in an environment where consumers have preferences and they have choices.” Additionally, Rivian is facing production challenges. Last month, the company suspended production of electric delivery vehicles for one of its largest customers, Amazon (AMZN). Munoz also noted that production volumes were down last quarter, and while the company appears to be hitting its targets, he’s “uneasy.” Finally, he argues that Rivian’s product is not only narrow compared to other EV companies, but also too expensive. Coupled with production challenges, “They have to get these vehicles to market and sell them and become a profitable company to grow revenues. And I expect they’ll get there by 2026. I’m not sure they’ll get there,” he adds. Munoz concludes, “If they can get their costs down, leverage their partnership with Volkswagen, ramp up production and get cars on the road, I think it’s going to be very positive for Rivian in the long run.” For more expert insights and the latest market trends, click here to watch this full episode of Market Domination. This article was written by Melanie Leal. Note: This post has been updated to correct Munoz’s company name.
