We recently put together a list of the 13 Top Automobile Stocks to Invest in for 2025 . This article will examine how Rivian Automotive, Inc. (NASDAQ:RIVN) measures up against other automobile stocks.
The term "car stocks" refers to the inventory levels maintained by companies involved in the automobile sector, including manufacturers of vehicles, suppliers of car components, or firms offering related services within this field.
Reuters reports that U.S. new vehicle sales in 2024 saw substantial growth compared to their low points during the pandemic, driven by higher production levels, replenished stockpiles, and rising interest in hybrids. According to data from Wards Intelligence, new car sales in the country reached 15.9 million units in 2024—a 2.2% increase over 2023—and marked the strongest performance since 2019.
By 2025, according to S&P Global predictions, worldwide sales of newly manufactured light vehicles—comprising both passenger cars and trucks—are expected to increase by 1.7%, totaling approximately 89.6 million units. This forecasted decline from previous estimations for 2025 stems primarily from potential shifts in U.S. policies post-election. These alterations could significantly influence vehicle demand, notably affecting areas such as interest rates, international trade patterns, supply chains, and the pace at which Battery Electric Vehicles (BEVs) are embraced.
Colin Couchman, who serves as the executive director of global light vehicle forecasting at S&P Global Mobility, remarked:
2025 appears to present unprecedented challenges for the automotive sector, with major regional demand drivers constraining market potential and the newly elected U.S. government introducing additional unpredictability right from the start," "One significant worry is how genuine electric vehicle (EV) demand will fare as policymakers reconsider their support measures, particularly regarding incentives, subsidies, trade policies, and rapidly changing manufacturer objectives.
Chris Hopson, lead analyst at S&P Global Mobility, has indicated that potential buyers of new vehicles are rushing to dealerships before anticipated changes in pricing take effect. This surge in purchases during March and April could set the stage for increased market fluctuations down the line. Over the coming quarter, auto manufacturers will have to contend with tariffs affecting their stock levels along with ongoing unpredictable economic circumstances.
In reaction to criticisms from within the automotive sector, President Trump announced a two-year exemption related to domestic sales and production levels, aimed at easing the recent imposition of 25% tariffs on vehicles and their components. This allows manufacturers operating in the U.S. to offset some import levies based on the vehicle’s suggested retail price; specifically, this deduction starts at 3.75% during the initial year before dropping down to 2.5% in the following one. Cars composed of 85% American-made, Canadian-built, or Mexican-produced materials won’t be subject to these tariffs—a threshold set to climb up to 90% as we advance further into the coming year. Additionally, businesses involved were relieved of supplementary charges applied to goods originating from Canada and Mexico along with those involving steel and aluminum imports. The decision came after trade associations cautioned about potential hikes in automobile pricing, declines in consumer purchases, and increased maintenance expenses due to the implementation of such fees—tariffs took hold in March concerning finished autos and expanded over to parts beginning early May.
The CEO of GM, Mary Barra, said:
We appreciate President Trump’s backing of the U.S. auto sector and the millions of Americans reliant on our industry,
Despite this, expect an abundance of competition as major companies vie for their slice of the market pie since the automotive sector continues to transform. As stated by Dentons, the automotive industry must exhibit adaptability, innovation, and flexibility in 2025 due to shifting customer preferences, new regulations, and financial hurdles. OEMs can set themselves up for triumph in a fiercely contested and rapidly progressing marketplace by leveraging advancements in production tech, software-driven cars, and EVs.
An advanced electric car getting charged at a facility located in a shopping center on the outskirts of town.
Methodology:
To compile our list of car stocks for this article, we reviewed various online rankings to create an initial roster featuring the top 20 candidates. Next, from these selections, we identified the 13 stocks most favored by hedge fund investors based on data provided by Insider Monkey, which tracks over 1,009 hedge funds during the fourth quarter of 2024. In instances where multiple stocks were backed by the same number of hedge funds, we relied on their year-over-year revenue growth figures to finalize our choices.
What draws us to the stocks that hedge funds amass? It boils down to this: our studies indicate that mimicking the top choices from leading hedge funds allows us to surpass the broader market performance. Each quarter, our biannual advisory highlights 14 small-cap and large-cap equities, delivering an impressive return rate of 275% since May 2014, thereby exceeding its benchmark by as much as 150 percentage points. see more details here ).
Rivian Automotive, Inc. (NASDAQ: RIVN )
Number of Hedge Fund Owners: 40
Rivian Automotive, Inc. (NASDAQ:RIVN), an automaker specializing in electric vehicles along with associated software and service offerings, debuted its consumer automobile line-up using the R1 platform. This lineup consists of two models: the R1T and the R1S. Rivian operates under two primary segments—the Software and Services division and the larger Automotive sector, where most of their earnings originate. Revenue within the Automotive segment comes from producing and selling new electric vehicles, alongside profits generated through sales of regulatory credits derived from these EV productions. Meanwhile, the Software and Services section derives significant contributions towards both revenues and expenditures from activities such as developing vehicle electrical systems and software, providing repairs and maintenance, and engaging in vehicle resale operations. Over the last twelve months, this stock has appreciated over 29%, positioning itself among notable performers. Best Auto Stocks.
Rivian Automotive, Inc. (NASDAQ:RIVN) recorded a gross profit of $170 million during the last quarter of 2024 due to escalating fixed costs, increased revenue from each delivered vehicle, and elevated variable expenses. The firm anticipates that these enhancements will prove advantageous in the future and enable them to achieve modest profitability in 2025. They announced unprecedented revenues for the final quarter of 2024, fueled by sales of regulatory credits, growth in software offerings, and expanded service provisions, alongside higher average sale prices for the R1 model as the Tri-Motor option gained broader accessibility. In total, their revenue surged by 33% compared to the same period in the previous year during the fourth quarter of 2024.
Rivian Automotive, Inc. (NASDAQ:RIVN) is moving closer to achieving profitability. For the fourth quarter of 2024, they reported their initial quarterly gross profit at $170 million. With $7.7 billion available in their cash reserves, Rivian has sufficient funds to manage losses even with increased production levels. Nevertheless, should the firm encounter difficulties, this could lead to substantial fiscal hurdles. At present, the company’s market capitalization stands at approximately $13 billion, an amount that appears reasonable when taking into account its revenue figures.
Overall, RIVN ranks 8th In our compilation of Top Automotive Stocks to Invest in During 2025, although Rivian (RIVN) shows significant promise, we feel strongly that Artificial Intelligence stocks offer superior prospects for achieving substantial gains with quicker turnaround times. Notably, one AI stock has surged year-to-date even as many prominent AI equities have declined approximately 25%. For those seeking an AI-focused alternative to RIVN that boasts a price-earnings ratio under five, explore our detailed analysis on this opportunity. cheapest AI stock .
READ NEXT: 20 Top AI Stocks You Should Consider Buying Today and 30 Top Stocks to Purchase Currently as Recommended by Millionaires .
Disclosure: None. This piece was initially published at Insider Monkey .
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