EV stocks have taken a beating in 2022, along with most other tech names. Even though sentiment is depressed right now, some EV stocks will be highly profitable in the long run.
According to the annual Global Electric Vehicle Outlook, sales of electric cars doubled year over year in 2021 to a new record of 6.6 million, with more now sold each week than in the whole of 2012. Despite global supply chain snares, EV sales have kept rising in 2022.
Investors seeking high-growth potential at a discount would do well to consider some names from the EV industry. However, not all EV stocks are created equal. Today we’re focusing on a smaller electric vehicle maker with colossal staying power. For investors with some risk tolerance, this compelling EV story could prove highly rewarding over the next few years.
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EV maker, Rivian’s (RIVN) IPO was one of the largest in U.S. history. Still, it has been forsaken by investors as fears of a slowing economy and recession have taken hold. But in the long run, the EV market will continue its growth, and Rivian is poised to become a major player.
Although it’s a smaller company, Rivian has a distinct strategic advantage over its competitors. Its partnership with Amazon began in 2019 and gives Rivian staying power investors can rely on. In collaboration with Amazon, Rivian operates its commercial vehicle platform for electric delivery vans. The first big order for the platform comes from none other than – Amazon. The e-commerce giant is in line for 100,000 custom-built electric delivery vans from Rivian by 2025 as part of its efforts to completely electrify its last-mile fleet by 2040. Amazon is also Rivian’s largest shareholder, with a 20% stake.
While Rivian has only just begun delivering its vehicles, it is well on track for meeting its goal of producing 25,000 vehicles this year. In the third quarter, the company produced 7,363 vehicles at its manufacturing facility in Normal, Illinois. As of June 30th, the preorder backlog on its flagship, R1 models, was approximately 98,000 from consumers in the U.S. and Canada.
The company isn’t profitable yet, and the stock is currently trading at a 75% discount from its post-IPO high, but for investors with some risk tolerance, Rivian is a compelling story that could prove to be highly rewarding over the next few years.