Here are the best electric car stocks for 2024 (hint: they’re not Tesla).

Tesla (NASDAQ:TSLA) stock has more than doubled this year, so value-oriented investors might be hesitant to buy now. But there’s more to the electric vehicle (EV) market than Tesla. Dig a little deeper and you’ll find some compelling reasons to choose Rivian Automotive (NASDAQ:RIVN) for EV industry exposure in 2024.

Of course, Rivian doesn’t have a price-to-earnings (P/E) ratio, so it may not fit the textbook definition of a good value. But forward-thinking investors should put the textbooks back on the shelf and consider the tailwinds that could grow RIVN stock at a rapid pace over the next year.

Resilient Rivian raises production forecast

Wall Street’s concerns may be about slowing demand for EVs, but Rivian Automotive’s management doesn’t appear to be too concerned. The automaker raised its 2023 vehicle production guidance from 2,000 to 54,000 vehicles in its third-quarter shareholder letter.

In contrast, rival EV manufacturer Lucid Group (NASDAQ:LCID) reduced its annual EV production forecast to a new range of 8,000 to 8,500 units from its previous forecast of 10,000 units.

This led Rivian Automotive CEO RJ Scaringe to declare, “I’m honestly surprised to see how far other people have taken a step back.”

Moreover, Rivian reported an earnings loss of $1.19 per share in the third quarter, beating analysts’ consensus estimate of a loss of $1.31 per share. Rivian also produced 16,304 EVs in the third quarter of 2023, more than double the 7,363 it produced in the same period last year.

Overall, Rivian Automotive appears to be on the right track despite sluggish EV demand. The company is currently enjoying a winning streak of consistently beating quarterly results. So some benchmark value investors might forgive Rivian for not being profitable and not having a P/E ratio.

Big plans for affordable EVs

What can Rivian Automotive do to close the profitability gap in the future? The answer is to produce EVs that American buyers can afford. It’s easier said than done, but Rivian will get the job done.

Rivian’s R1T electric pickup truck is visually appealing and powerful, but it doesn’t come cheap. American consumers should expect to pay at least $70,000 if they want to purchase the R1T.

But this is not the end of Rivian Automotive’s story. Tesla has started an EV price war, but Rivian isn’t going to let Tesla dominate the market. Rivian reportedly plans to produce its upcoming R2 vehicle model at its second EV manufacturing plant, which will be located in Georgia.

The starting price of the R2 is expected to be $40,000 to $45,000, and Rivian Automotive plans to reveal it in 2024 and launch it in 2026. So while investors shouldn’t be looking for an R2 on the road tomorrow or next week, they should understand that expectations of an affordable EV model alone could propel RIVN stock in the coming quarters.

One thing Tesla doesn’t have

Tesla has a famous founder, Elon Musk, and widespread brand recognition. One thing Tesla doesn’t have is vehicle supply deals with e-commerce giants and telecom giants.

As you may have already heard, Rivian Automotive has agreed to provide EVs for Amazon’s fleet. The deal strengthens Rivian’s revenue-generating potential and reputation.

But some investors may have wondered whether Rivian Automotive’s deal with Amazon might prevent it from pursuing other high-profile vehicle electrification deals. As it turns out, Rivian answered that question emphatically in December.

In a blockbuster news story, Rivian Automotive announced an agreement with AT&T (NYSE:T) to provide EVs for its fleet. According to a press release, AT&T “expects to begin adding Rivian Commercial Van and R1 vehicles to its fleet in early 2024.”

Look beyond Tesla

So Rivian’s deal with Amazon doesn’t preclude the company from pursuing other big-ticket deals. As AT&T pursues carbon neutrality, will other large companies turn to Rivian Automotive to electrify their business vans and trucks?

This is an interesting question for prospective investors to consider. Frankly, Musk’s personality may be off-putting to some businesses. Meanwhile, Rivian Automotive is willing to accommodate the demands of well-capitalized, well-known suppliers.

This is not a call for investors to dump Tesla stock. Rather, this is something that Tesla’s most ardent fans might consider an indecent proposition. RIVN stock could be surprisingly high in 2024, providing an opportunity for EV manufacturers other than Tesla.

disclaimer: All investments involve risk. Under no circumstances should this article be taken as investment advice or constitute liability for investment profits or losses. The information in this report should not be relied upon for investment decisions. All investors should conduct their own due diligence and consult their own investment advisors when making trading decisions.