It’s 2023, so most Australians, and probably all investors, would be familiar with US electric vehicle and battery manufacturer Tesla Inc (NASDAQ: TSLA) and its shares by now.
Tesla has made massive gains in market share with its electric vehicles, both in Australia and around the world. According to Drive, the Tesla Model Y was the fourth-highest-selling car in Australia in July 2023, and was the second-highest-selling model for June.
But the Tesla share price has been accelerating even faster than the company’s car deliveries. Tesla stock is up 131% in 2023 so far, as well as up a whopping 953.6% over the past five years.
For lucky investors who have held Tesla shares for many years, these gains have been very welcome indeed. But today, Tesla is a US$782.4 billion company. As such, it’s arguably unlikely (though not impossible) that investors will enjoy a similar level of prosperity over the next five years.
So perhaps electric vehicle fans should look elsewhere for the ‘next Tesla’. A leading candidate for that moniker might be Rivian Automotive Inc (NASDAQ: RIVN).
Are Rivian shares the ‘next Tesla’?
Rivian is an early-stage US-listed electric vehicle company. Perhaps its biggest claim to fame is the endorsement of US e-commerce behemoth Amazon.com Inc (NASDAQ: AMZN). Amazon owns a 17% share of Rivian and even has an exclusive contract with the company for electric vans.
As it stands today, Rivian has a market capitalisation of US$23.3 billion. That means that Tesla is currently more than 33 times larger than Rivian by market cap.
That might imply that Rivian is the stock that has the most growth potential. The company has indeed been making impressive strides. Our Fool colleagues in the United Kingdom report that Rivian delivered just 920 vehicles in 2021. But by last year, this had exploded to 20,322, and the company is estimated to sell 50,000 vehicles this year.
However, Tesla is still leaps and bounds ahead of Rivian in this department. 2021 saw Tesla deliver 936,172 vehicles. But this year, it’s estimated that Tesla will crack 1.8 million deliveries. 2024 could see this number rise even further if the company’s long-awaited Cybertruck model proves a hit.
So Rivian does look like an exciting company to be sure. But, personally, I’m still sticking with investing in Tesla. In Tesla, we have a company that has proven runs on the board when it comes to stellar growth. Plus, Tesla has some of the best brand recognition in the world, whereas I’d bet that most Australians wouldn’t have heard of Rivian.
Sure, Rivian stock might indeed rocket over the next few years. But it might also buckle under the competitive pressures of the global car market. That’s not a choice I’m prepared to wager on right now.
