2 Top EV Stocks to Buy in February

Electric vehicle (EV) sales struggled in 2024, but not in the way you’d think. Tesla, for instance, experienced a 1% annual sales decline in 2024, its first in over a decade. This growth rate fell below the company’s expectations. In fact, industry growth as a whole fell below analyst expectations.

But don’t let these poor figures fool you. In 2024, EV sales in the U.S. still grew by 7.3%, with 1.3 million EVs sold — a new record. And globally, around 20% of all vehicles sales were EVs last year. According to most experts, more growth is on the way for years, if not decades, to come.

If you want to ride this growth opportunity, here are two stocks you should get to know.

Rivian: My favorite EV stock right now

When it comes to EV stocks, my favorite company right now is Rivian Automotive (RIVN -2.50%). This stock is the perfect blend of risk and reward right now, but there’s an important caveat you need to be aware of.

Starting an EV company from scratch is hard work. Of course, there’s the long hours involved as an entrepreneur, but the biggest hurdle seems to be fairly simple: access to capital. It can often take a decade or more to get a vehicle from the idea stage to actual mass production. Many EV start-ups have failed before delivering their first vehicle due to running out of money.

This is what makes an EV maker like Rivian so attractive. The company is still quite small, with sales under $5 billion. Yet it’s proven to the market and investors that it can deliver EVs that customers love at some sort of scale. According to a Consumer Reports survey, Rivian scored the highest of any car manufacturer when it comes to customer satisfaction and loyalty, a list that included not only other EV makers, but also conventional auto manufacturers.

To be sure, Rivian isn’t out of the woods yet when it comes to capital. It’s still losing money on every vehicle it makes, and last quarter burned through more than $1 billion in cash.

But that could change quickly when it introduces its three new mass-market vehicles in 2026, all of which should cost less than $50,000 for a base model. These affordable models should send sales soaring if they’re able to hit the market on time and sustain the company’s reputation for quality. Significantly higher sales could provide the operating leverage necessary to finally achieve profitability, something Tesla achieved more than a decade ago.

Right now, Rivian shares trade at just 2.8 times sales, versus Tesla’s valuation of 13.6. While not exactly apples-to-apples businesses, I believe Rivian’s projected sales ramp-up in 2026 and potential flip to profitability would narrow this valuation gap significantly. But investors looking to take advantage will need to remain patient for another year or two.

RIVN Revenue (TTM) data by YCharts

Lucid Group shares can deliver maximum growth

Want maximum growth potential? Your best bet right now is Lucid Group (LCID -2.08%). Lucid’s sales base is roughly 80% smaller than Rivian’s right now, and the company is further away from launching mass-market models capable of adding significantly more growth than its current luxury lineup.

However, this smaller size should help it sustain higher growth rates than Rivian’s over the next year or two, especially given its Gravity SUV platform launched only last month. Already, January’s sales were 50% higher than the year before, though the total number of vehicles sold remains low at just 665 vehicles last month.

LCID Revenue (TTM) data by YCharts

I’m not as big of a fan of Lucid due to its valuation. Shares trade at 9.2 times sales, versus 2.8 for Rivian. But there’s no doubt that Lucid’s near-term growth rates will be higher. This year, analysts expect sales to grow by 117% for Lucid, but just 11% for Rivian. I think Rivian’s valuation and long-term growth prospects are superior, but those looking for maximum sales growth right now should stick with Lucid and its near-term potential.