Ford and Rivian Announce Big Developments -- but Are They Buys Now?
Key Points
- Ford is taking a $19.5 billion one-time write-off as it pulls back in the EV space.
- Rivian is still investing billions as it prepares to launch the R2, a lower-priced EV truck.
NASDAQ: RIVN
Rivian Automotive
Ford is cutting its EV truck, and Rivian is about to launch a new one.
Ford Motor Company(F+1.95%) andRivian(RIVN+26.64%) appear to be moving in opposite directions right now. Ford is leaning away from all-electric vehicles (EVs), while Rivian, which makes only EVs, is leaning in. Both choices could work out well, but does that mean these stocks are worth buying?
Ford is fine-tuning its approach
Ford is an iconicautomotive company. The core of its business is internal combustion engines, but it has started to move toward EVs. However, it's stepping back from its earlier aggressive approach as demand for EVs didn't always justify the expense of building them. It's shifting toward lower-priced EVs and hybrid vehicles, specifically noting that it will no longer make an all-electric version of its hugely popular F-150 truck.
Image source: Getty Images.
The bad news is that this decision will lead to a $19.5 billion one-time charge. The good news is that the change could better align the company's auto lineup with customer demand and lead to stronger profits down the road. If you think long term, this decision makes a lot of sense and could be a reason to jump aboardFord's stock.
However, the stock is trading near 52-week highs. The stock's price-to-earnings ratio is a bit above its five-year average. The price-to-sales and price-to-book value ratios are roughly in line with their five-year averages, but you're probably paying full fare, if not a little more. If you have a value bias, Ford won't interest you.
NYSE: F
Key Data Points
Rivian is gearing up for the R2
Rivian makes high-end EV trucks. It's in the process of introducing the R2, which is a lower-priced EV truck model. The hope is to expand the company's sales so it can spread its costs across more vehicles and eventually become sustainably profitable. It has already started to showcase the R2, but it still isn't mass-producing them for sale.
NASDAQ: RIVN
Key Data Points
Rivian has the cash it needs to get the R2 to market, so it's almost certain to hit this goal in 2026 as planned. The big question is whether consumers will want to buy the R2 in large enough numbers. That question can't be answered until the R2 is actually being sold.
Given that this could be a make-or-break moment for Rivian, conservative investors will want to wait to see the R2's sales results before jumping aboard. That said, even more aggressive investors might want to wait, given the importance of this product launch.
Probably not great picks for most investors
In all, neither Ford norRivian stock looks like a screaming buy right now. A pullback in Ford's stock price could change that, as could a successful launch of Rivian's R2. It's probably best to keep these stocks on your watchlist for now.
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Stocks Mentioned
Rivian Automotive
Ford Motor Company
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