![](https://media.barchart.com/contributors-admin/common-images/images/Energy/Green%20Energy%20(EV%2C%20solar%2C%20etc.)/electric%20car%20charging%20parking%20spot%20by%20Adam%20Webb%20via%20iStock.jpg)
The last couple of years haven’t been good for investors in electric vehicle (EV) stocks. Barring Tesla (TSLA), which rallied sharply in 2023 after its crash in the previous year, most other pure-play EV stocks have largely been in a downtrend.
Even if the demand scare, massive overcapacity, unending price war, and higher interest rates were not enough, EV companies now face the prospects of Donald Trump becoming the U.S. President.
No industry perhaps would fear Trump’s return to the White House more than green energy. It is one sector where former President Trump’s policies are diametrically opposed to both Vice President Harris and President Biden. The former president is a climate change denier, and has vowed to end the electric vehicle “mandate” on the first day of his presidency.
Chinese companies could also be at the receiving end of Trump’s ire, as the GOP nominee has vowed to increase tariffs on Chinese goods even further. That said, I believe that Li Auto (LI) and Rivian (RIVN) are two EV stocks that look worth buying now, despite the seemingly unending woes of the industry.
Li Auto Is Growing Its Deliveries Profitably
While startup EV companies continue to struggle with perennial – and in some cases, widening - losses and cash burn, Li Auto seems like an oasis with its profitable operations.
![](https://barchart-news-media-prod.aws.barchart.com/EXCLSV/ab8f77797840486722a5077474051029/wrberilfvpsqr5ht.png)
While Chinese rivals, especially Xpeng Motors (XPEV), have struggled to grow their deliveries meaningfully, Li Auto delivered 51,000 vehicles in July. That was almost 50% higher YoY, and easily surpassed the combined deliveries of NIO (NIO) and Xpeng that month.
Li Auto has hit several delivery milestones in the Chinese new energy vehicle market, and its cumulative deliveries now look on track to top the combined deliveries of NIO and Xpeng. Notably, LI also sells hybrid cars along with battery-electric cars, which has helped it cope with the slowdown much better.
Li Auto Stock Trades at Attractive Valuations
Li Auto held a formidable $13.7 billion in cash on its balance sheet at the end of March, while its market cap is below $21 billion. The company trades at a next 12-month (NTM) enterprise value-to-sales multiple of just 0.45x, while the NTM price-to-earnings (PE) multiple is just 15.8x.
To be sure, Li Auto’s earnings are expected to fall in 2024, despite rising deliveries, due to the ongoing price war in the Chinese EV market. However, analysts expect its net profits to rise 51% to over $2 billion in 2025.
Li Auto’s profitable operations and strong balance sheet give it leeway to lower prices and undercut competitors – a luxury very few EV companies, with the notable exception of Tesla, have. Overall, given its strong financials, healthy balance sheet, and attractive valuations, I find Li Auto a good EV stock to buy amid the dip.
Rivian Has Lowered Its Loss Per Vehicle
Among U.S.-based EV companies, I find Rivian a compelling bet. While it is not profitable yet, the company is steadily working in that direction.
In Q2, it lost $32,700 per vehicle - and while that number is not something that management might want to brag about, it's below the $38,700 that it lost in Q1. Rivian also maintained its 2024 production guidance of 57,000 units, and is still optimistic about turning positive on the gross profit level by Q4.
Again, while a company merely maintaining its guidance wouldn’t necessarily be big news, it is nonetheless a positive in this scenario, as the EV market conditions have only deteriorated since Rivian initially provided its guidance.
![](https://barchart-news-media-prod.aws.barchart.com/EXCLSV/ab8f77797840486722a5077474051029/5pcjjqodanvfhinv.png)
Volkswagen Has Partnered with Rivian
In June, Rivian and Volkswagen (VWAGY) announced a strategic partnership, under which the German auto giant will invest a total of $5 billion in RIVN. The deal will help strengthen Rivian’s balance sheet, and the two companies could even expand the partnership in the future, including joint production and sourcing.
Volkswagen has also expanded its partnership with Xpeng Motors, after an initial investment in 2023. Notably, Volkswagen has been hedging its bets in the EV landscape, and apart from Rivian and Xpeng, it has also invested in solid-state battery startup QuantumScape (QS).
Rivian offers an attractive product, which includes both the hardware and the software. The company’s models have received good reviews from both auto analysts as well as buyers. For instance, Car and Driver rated its 2025 R1T as 10/10, and was quite impressed with the model.
For me, Rivian ticks all three boxes that a startup EV company should have to survive the current markets – an attractive product, a strong balance sheet, and a credible management team that has its eye on the margins while also expanding the topline.
With an NTM enterprise value-to-sales multiple of 2.49x, Rivian looks worth the risk, despite the EV industry turmoil. Wall Street analysts have rated RIVN stock as a “Moderate Buy” and its mean target price of $18.82 is almost 35% higher than Friday’s closing prices.
On the date of publication, Mohit Oberoi had a position in: LI , NIO , XPEV , RIVN , TSLA . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.