Although the electric vehicle sector is currently less heated than tracks such as AI, and faces short-term pressures including subsidy phase-outs and intensifying competition, the long-term global trend toward electrification remains clear. Rivian (RIVN), with its upcoming R2 model poised to ramp up production, is expected to improve its financial performance, while NIO (NIO) continues to expand by leveraging its battery-swapping ecosystem, self-developed chips, and multi-brand strategy. Both stocks are currently trading at historically low valuations, and if their respective strategies proceed smoothly, they may offer investors attractive long-term positioning opportunities.
Rivian went public in 2021 at $78 per share, and its current stock price is around $16, with a valuation of less than twice next year’s expected sales, compared to Tesla’s (TSLA) 13 times. This low valuation reflects its persistent production issues.
Before the launch of the R2 SUV this year, Rivian sold only three models: the R1T pickup, the R1S SUV, and electric delivery vans custom-built for companies such as Amazon. However, Rivian expects that the R2 model, which starts at $57,990 and is set to launch in March this year, will boost annual deliveries to between 62,000 and 67,000 vehicles. Analysts project that its full-year revenue will grow by 31%. The company also plans to release a cheaper version of the R2 at approximately $45,000 by the end of 2027. Since the R2 uses fewer electronic control units, upgraded battery packs, simplified wiring harnesses, and larger integrated die-cast parts, its manufacturing cost is lower than that of the R1 series. Therefore, rising R2 sales are expected to improve gross margins and narrow losses.
Analysts project that from 2025 to 2028, Rivian’s revenue will more than triple, from $5.4 billion to $16.9 billion, and that it will turn adjusted EBITDA positive in the final year. Although these forecasts should be viewed with caution, if the R2 attracts more consumers, Rivian may indeed be on the cusp of a historic turnaround.
NIO, a major Chinese electric vehicle manufacturer, went public in 2018 at $6.26 per American Depositary Receipt (ADR). Its current share price is approximately $5, less than one times next year’s expected sales, making its valuation appear highly attractive.
NIO’s discount reflects persistent market concerns over its substantial losses and competitive pressures. However, from 2020 to 2025, its annual deliveries surged from 43,728 to 326,028 vehicles, with a revenue compound annual growth rate of 40%. NIO sells a range of electric sedans and SUVs and differentiates itself through its swappable battery technology—users can quickly swap batteries at its battery-swapping stations as an alternative to charging. In addition, NIO’s self-developed Shenji chip outperforms Nvidia’s Orin-X chip in performance and is used to support autonomous driving functions.
NIO continues to grow rapidly, with its namesake brand steadily increasing its market share in China’s premium electric vehicle segment. At the same time, the company is selling more mid-range and lower-end SUVs and compact models through its new brands ONVO and Firefly, while gradually expanding into the European market. Analysts expect that from 2025 to 2028, its revenue will nearly double, reaching RMB 174.4 billion (approximately $25.8 billion).
As economies of scale materialize, NIO’s vehicle margin is improving. Recently, NIO spun off its loss-making chip manufacturing division into an independent company, GeniTech, to reduce operating expenses. The company has posted profits over the past two quarters, and analysts expect it to achieve its first full-year profitability in 2027. These positive factors suggest that NIO’s stock may be significantly undervalued, and if the market repositions it as a growth stock, it could deliver multi-fold returns over the next few years.
