Prediction: Could be the best-performing EV stock by 2030.

Electric vehicle (EV) stocks are off to a difficult start to 2024 as industry sales growth slows. Additionally, with both established automakers and startups entering the market, consumers have more EV brands to choose from. Nonetheless, EV stocks still have strong long-term potential.

Let’s take a look at two EV stocks that could be the best performers through 2030.

tesla

This year has not been kind to EV leaders. tesla (TSLA -3.54%). The company’s first-quarter sales fell 9% to $21.3 billion, with automotive sales down 13% to $17.4 billion. Vehicle deliveries fell 9% to 386,810 units, which also lowered the average selling price of vehicles. This resulted in adjusted earnings per share plummeting 47% to $0.45 and a cash outflow of $2.5 billion.

A sluggish start to the year has left Tesla stock down about 28% year to date. But Tesla is more than just an EV, and investing in its stock is an investment in founder Elon Musk’s vision. The company has several plans in place that could potentially push its stock price even higher by 2030.

One of its biggest initiatives is creating a fleet of autonomous vehicles and robotaxi. Tesla has long been a leader in self-driving technology, and plans to launch a robotaxi later this year in August. The robotaxi fleet will put the company in direct competition with: Uber and lift, but Tesla will give drivers the big advantage of not having to pay for it. And when the vehicle isn’t in use, Musk has talked about using its computing power for AI inference, adding additional revenue opportunities.

Meanwhile, the company’s energy storage business is showing solid growth. Musk has long predicted that this business would grow faster than its automotive business because utility-grade megapack batteries are being used in the world’s largest energy storage projects. The company sees this business growing at least 75% this year and expects continued strong growth going forward.

However, during Tesla’s last conference call, Musk predicted that the Optimus robot business could become the company’s largest segment. He expects the humanoid robots will be ready to perform useful tasks inside Tesla factories by the end of the year and possibly for sale outside by the end of next year.

Tesla is doing a lot to foster growth, which is why it should be one of the top EV performers by 2030.

rivian

rivian cars (RIVN -7.01%) The stock has had a difficult year in 2024, falling more than 50%. Unlike Tesla, Rivian has seen solid sales and vehicle delivery growth so far in 2024. In fact, first-quarter sales rose 82% to $1.2 billion, and vehicle deliveries increased 71%. 13,588 units

The company’s problem is that it is currently selling its vehicles for less than it costs to build them. This is reflected in the company’s gross margin per vehicle. negative $38,784. This also caused the company to burn a lot of cash, recording negative free cash flow of $1.5 billion in the quarter.

However, Rivian is working to improve this situation by lowering the cost of building its vehicles. This includes redesigns to reduce the number of electronic control units in the vehicle and find cheaper alternative materials. We are also upgrading technology in our manufacturing facilities to improve line speeds. With this work, the company expects to achieve moderate gross margin in the fourth quarter.

Image source: Getty Images.

What’s also in Rivian’s favor is: Amazon It is the largest shareholder, owning more than 16% of the shares. The e-commerce giant has also signed a deal with the company to purchase 100,000 electric vans, which will be delivered by 2040.

Amazon has experienced delays in vehicle deliveries due to a lack of charging station infrastructure, but has now completed the installation of 17,000 chargers in 120 warehouses, making it the largest operator of private EV charging stations. Now that the infrastructure is in place, orders are expected to begin shipping.

Given its negative gross margins and cash outflows, Rivian is a speculative stock, but it has the pieces to increase profitability by 2030 and become one of the best-performing EV stocks.