Key Points
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Tesla is the EV leader and is looking to tap into several transformational opportunities.
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Rivian could ride a strong tailwind from a new model launch and its efforts to achieve self-driving capabilities.
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One of these stocks looks much more attractive than the other.
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In May, the electric vehicle (EV) industry in the U.S. experienced its best month (in terms of sales) since EV tax credits expired late last year. Meanwhile, in other regions, particularly in Europe, EV sales recently surged. These data points suggest that EV adoption may continue to grow as people seek alternatives to gas-powered cars, given rising oil prices. And for what it’s worth, some analysts predict the market will expand at a good clip well into the next decade. Two of the best stocks to capitalize on this are Tesla (NASDAQ: TSLA) and Rivian (NASDAQ: RIVN). But which one should you invest in with $1,000?
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Tesla is much more than an EV play
Tesla is the global leader in the EV market, a status it briefly lost at the end of 2025 only to regain it in the first quarter of 2026. The company’s Model Y has been the world’s best-selling car for several years. Further, Tesla recently reported its second-quarter delivery numbers, which were pretty impressive. The company’s deliveries during the period totaled 480,126. Not only was that a 25% year-over-year increase, but it also came in well ahead of the consensus analyst estimates.
The stock fell sharply even after Tesla posted this report, perhaps because it was already baked into the share price. Also, investor expectations have shifted. Tesla is no longer just a company that sells EVs. Its investment thesis is increasingly tied to its ambitious robotaxi and humanoid robot projects. That’s why it commands such a steep forward price-to-earnings ratio of 178.6.
Progress with these projects is more likely to jolt the stock. And we could hear some news from Tesla on its humanoid robot initiative — and perhaps a reveal of Optimus 3 — toward the end of July. Elsewhere, the company’s robotaxi business recently launched in Miami. The company still has a long way to go before this business contributes meaningfully to its financial results, but every new city provides Tesla with more real-world data to train and improve its self-driving system.
Meanwhile, Tesla continues to generate decent financial results. In the first quarter, the company’s top line grew 16% year over year to $22.4 billion, while its adjusted earnings per share rose 52% to $0.41. Lastly, Tesla is investing heavily in artificial intelligence (AI) to power its robotaxi and humanoid robot projects. Although that may shrink margins in the short run, the investment could pay for itself several times over, provided Tesla’s vision materializes.
Can Rivian challenge the market leader?
Rivian recently launched the R2, an EV that will compete directly with Tesla’s market-leading model. The R2 is a midsize SUV with a much more approachable starting price than Rivian’s previous models. By the looks of it, its launch is going fairly well. Rivian recently posted Q2 delivery numbers that blew past analyst expectations. The company delivered 12,194 EVs during the period, exceeding its 9,000-11,000 projections. The company said that the introduction of the R2 helped drive the quarterly beat.
Rivian is also working hard to achieve full self-driving capabilities. The company entered into a deal with Uber Technologies (NYSE: UBER) to deliver up to 50,000 fully autonomous EVs through 2031. Uber will invest up to $1.25 billion in Rivian as part of this deal.
Between the R2, which may be a hit among individual consumers, and, potentially, strong corporate demand for its EVs if it can achieve full self-driving capabilities, Rivian may experience solid momentum over the next few years. The company’s financial results could improve as well. Rivian isn’t profitable yet, but its first-quarter revenue grew 11% year over year to $1.4 billion, while its net loss of $416 million was slightly better than the $541 million loss in the year-ago period.
Lastly, Rivian’s margins and profits could benefit as the company completes construction of its new Georgia plant, which could help the EV maker achieve economies of scale.
Put $1,000 into this EV stock
Both stocks are fairly risky and should continue experiencing significant volatility. However, in my view, Tesla is the more attractive of the two. Here are four reasons why. First, Tesla is still the EV market leader. It boasts strong brand recognition, along with other advantages, such as a vast network of manufacturing plants that has enabled it to achieve economies of scale. Tesla can afford to cut its prices to counter the competition much more than Rivian can, without hurting its profits as much.
Second, although smaller companies often have more upside potential, that may not be the case here. Tesla’s robotaxi and humanoid robot projects, if successful, could send the stock soaring over the next decade. Third, Tesla can fund its aggressive ambitions without resorting to dilutive financing. Rivian recently announced a new share offering that will dilute existing shareholders.
Lastly, Rivian is far more dependent on the success of any one of its projects. And if it fails to reach full self-driving capabilities within a few years, for instance, its stock price will likely drop off a cliff. Tesla has more flexibility and room for error. For all those reasons, Tesla is the better option, and investors can grab two of the company’s shares with $1,000.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
