Rivian vs. Hyliion Holdings: Which Electric Vehicle Stock Is a Better Buy?

: RIVN | Rivian Automotive Inc. Cl A News, Ratings, and Charts

RIVN – Rivian (RIVN) and Hyliion Holdings (HYLN) are both electric vehicle (EV) stocks that are yet to report any material revenue but are in a fast-growing industry. Today I’ll analyze each company to determine which is currently the better stock to buy.

The last few trading sessions have seen a significant decline in growth stocks. Investors are worried about rising inflation rates which in turn might lead to higher interest rates going forward. Further, the steep valuations of several companies on Wall Street have also contributed to the sell-off.

The electric vehicle (EV) industry has been one of the losers, with the Global X Autonomous & Electric Vehicles ETF (DRIV) down 4.7% in the past week.  Shares of EV manufacturers Rivian (RIVN) and Hyliion (HYLN) have seen even bigger losses, each down more than 13%.

Given the rapidly expanding addressable market for companies part of the EV space, the ongoing pullback could present a buying opportunity for long-term investors. With that in mind, if you’re considering buying an EV stock on the dip, today I’ll analyze both RIVN and HYLN to determine which is currently the better investment.

Is Rivian stock overvalued?

A stock that recently went public, Rivian was the first company to be valued at a market cap of over $100 billion without reporting any sales. However, the company is backed by Amazon (AMZN) which has also placed a pre-order of 100,000 delivery vans with Rivian. Further, Rivian has just begun deliveries of its passenger pickup truck called the R1T.

According to company CEO R.J. Scaringe, Rivian should manufacture one million vehicles by 2030 which is pretty impressive. In case the company meets its production targets and prices vehicles at an average of $75,000, its total sales will be $75 billion. 

Further, a profit margin of 10% will allow it to generate $7.5 billion in net income. But these might very well be the best-case scenario for Rivian given the increase in competition and entry of legacy players in the EV segment. EV leader Tesla surpassed the $100 billion market cap threshold last year when it delivered close to 500,000 vehicles. 

The road for long-term Rivian investors is likely to be bumpy and volatile considering the company’s outstretched valuations. It will have to keep beating Wall Street estimates consistently but remains extremely vulnerable if stock market sentiment turns bearish.

Should you buy Hyliion stock?

Hyliion designs, develops and sells electrified powertrain solutions for the commercial transportation industry. It also provides battery management systems for hybrid and fully electric vehicle applications.

In Q3 of 2021, Hyliion reported a loss of $26.6 million or $0.15 per share which was narrower than estimates of $0.23 per share. The company claimed that ongoing supply-chain disruptions have delayed launch dates for its heavy-truck powertrains called the Hypertruck ERX.

In addition to the powertrain, Hyliion is also developing a hybrid system that can be added to already existing trucks that run on internal combustion engines.

Hyliion has confirmed the first unit of the hybrid system called the Hybrid eX has just been shipped and it will recognize revenue in Q4 of 2021 from this vertical.

The verdict

Both Rivian and Hyliion are high-risk bets for investors right now if we account for the lack of earnings and revenue visibility surrounding these companies. The two companies may have to raise capital several times to expand their manufacturing capabilities and this may result in severe shareholder dilution in the upcoming decade.

But Rivian has a better growth profile and is backed by Amazon, one of the largest companies in the world, which will also provide it with the required financial flexibility, making it a better investment for the long-term investor at current multiples.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


RIVN shares were trading at $101.54 per share on Monday morning, down $3.13 (-2.99%). Year-to-date, RIVN has gained 0.80%, versus a 22.65% rise in the benchmark S&P 500 index during the same period.


About the Author: Aditya Raghunath


Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
RIVNGet RatingGet RatingGet Rating
HYLNGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Does Trump Change Stock Market Outlook?

The rally of the S&P 500 (SPY) after the election gives a sense that investors are happy that Trump was elected. But perhaps there is more to this story than meets the eye. That’s why Steve Reitmeister shares his updated market outlook taking into account the pros and cons of Trumps proposed new policies. This comes with a preview of his top 11 stocks to buy now.

3 Streaming Stocks Benefiting from Cord-Cutting Trends

As streaming continues to dominate the digital entertainment landscape, the global streaming market presents a lucrative investment opportunity. So, it could be ideal to invest in fundamentally solid streaming stocks Netflix (NFLX), Walt Disney (DIS), and Roku (ROKU). Read further...

3 Gold Stocks to Buy as Safe-Haven Demand Grows

Gold is a stable investment now due to its role as a safe-haven asset during economic uncertainty, rising demand, industrial use, and growth, bolstered by central bank purchases and interest rate cuts. Therefore, investors should consider investing in top gold stocks such as Newmont (NEM), Barrick Gold (GOLD), and Agnico Eagle Mines (AEM). Read more...

3 AI Stocks Transforming Industries and Driving Future Growth

With rapid digitalization, rapid adoption, and development, as well as surging demand, the AI market is on the rise. Amid this backdrop, investors could buy fundamentally solid AI stocks NVIDIA Corporation (NVDA), Microsoft (MSFT), and Meta Platforms (META) poised for substantial gains. Continue reading...

Updated Stock Market Expectations

The S&P 500 (SPY) has already reached an impressive goal of hitting 6,000. Yet you can see how much shares are struggling now up against this resistance. Steve Reitmeister shares his views on what comes next for the market and his top 10 stocks to stay on the right side of the action.

Read More Stories

More Rivian Automotive Inc. Cl A (RIVN) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All RIVN News