Rivian Automotive vs. Lucid Group? Morgan Stanley says there is a clear winner
Feb. 03, 2022 8:56 AM ETRivian Automotive, Inc. (RIVN), LCIDBy: Clark Schultz, SA News Editor66 Comments
Spencer Platt/Getty Images News
Morgan Stanley said a survey of its clients in regard to which stock they would like to own between Rivian Automotive (NASDAQ:RIVN) and Lucid Group (NASDAQ:LCID) indicated a clear winner.
87% of the respondents said they like Rivian (RIVN) as an investment over Lucid (LCID).
Analyst Adam Jonas: "An investment in either company requires a need for long-term thinking and preparation for significant potential volatility around the ramp to high volume manufacturing. Technical factors aside (LCID’s 30% free float, 17% short base, high retail component, etc.), the market appears to be making the case that LCID can scale its award-winning Air into new segments and far lower price points to achieve many hundreds of thousands or potentially millions of units of EVs at some point in the future."
Morgan Stanley said it agreed with the consensus client pick of RIVN over LCID. Jonas and team noted that they believe LCID has some ingredients to be a relevant and long-standing competitor in the electric vehicle race, but have much more conservative expectations that drive the near-term price target of $16.
Meanwhile, Morgan Stanley has an Overweight rating on Rivian and price target of $147, which reps the potential for shares to double.
Rivian Automotive (RIVN) is down 38% on a year-to-date basis and Lucid (LCID) is off 27%.
Next step: Compare ratings, performance marks and valuation grades on Rivian and Lucid side by side.
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Comments (66)
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Nietzche
11 Feb. 2022
What a shitty article! Citing Morgan Stanley? Really? 😂😂
Paper_stax
05 Feb. 2022
All of the arguments made against owning Lucid were also made against Tesla in its infancy. What drives a person to choose an electric vehicle when transitioning from an combustion engine vehicle is practicality and efficiency. Why would anyone choose a less efficient EV with a lower range? They'd obviously aim for the vehicle that makes their transition seamless. That vehicle is Lucid; and with all the institutional investments previously being made in addition to the support of the Saudis, I can see them coming out on the top.
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Jayc428
08 Feb. 2022
@Paper_stax I get what you’re saying but LCID and RIVN are trading at something like $40B market cap. It took Tesla like 7 years to get to that point and in that time they were shipping cars, not profitable of course but they were moving notable amounts, while developing tech, service centers, dealerships, and charging infrastructure that didn’t exist. I don’t see giving LCID and RIVN or others a shortcut on valuation based on what Tesla has done when they haven’t really done anything yet.
Tonexx
09 Feb. 2022
@Paper_stax Must disagree, people are not really that concerned about efficiency! They are more concerned about costs, looks, range and performance. The problem with Lucid, is that the cars look like something my Dad would own. This is not to say that I don't like Lucid, I do. What I don't like is the price.... it is crazy high. Plus there is nothing captivating about it. .
farmersgroup
05 Feb. 2022
Rivian should be about the same price as Lordstown now. Their pickup trucks look pretty much the same. Only Lordstown doesn’t have support from Amazon’s boss. Look at Rivian stock price, it looks like Jeff already left the scene. Lucid made a safer and stronger car than Tesla S when you get hit by a truck. Go back and look at those Tesla cars that were destroyed in car accidents. I would consider buying Lucid above Tesla if I have the money.
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gmike21
04 Feb. 2022
Pamp it up, Uncle Morgy. You need to earn those fat-fingered commissions, don't you?
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Sgav
04 Feb. 2022
Morgan Stanley was the lead underwriter on the deal (top left) -- of course the company will pump it
Winnertakesall
03 Feb. 2022
Neither, both have outsized market caps, lots of capex and competitors. Why would anyone invest in a stock like this, you're better off driving to the nearest casino and putting it all on Red or Black.
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Ruffdog
04 Feb. 2022
@Winnertakesall Both will need equity raises, but RIVN has the backing of Amazon.
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manustocktrader
03 Feb. 2022
One is SPAC and other one is IPO? Which one gave these bankers millions in commission for IPO?
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archiitek
03 Feb. 2022
All I can say is that Rivian autos & trucks are butt ugly designs. I would buy a lucid or tesla any day.
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GearheadInLA
03 Feb. 2022
@archiitek all I can say is Apples/Oranges. If you don't need a truck - even a diminutive/semi-useful one like the Rivian (sized like the Maverick, basically), then you wouldn't look at it, regardless of your subjective feelings about its design. I think potential truck buyers look at the Rivian and think "small truck," not "cool new electric car shaped like a truck." I could be wrong, but this is how the Rivian hits me (a truck owner): It's an odd looking little truck that runs on electricity. So the question is really: will it serve the need of that potential buyer? Will it take share from the small/midsize Tacoma/Frontier sized trucks, or is it only competing with what I am calling "fake trucks" (meaning they aren't serious work or tow or haul vehicles) -- unibody vehicles like the new Ford Maverick or that Hyndai Santa Cruz or Honda's Ridgeline (basically rebodied sedans and Crossovers -- what they call "Ute" in Australia)? Will the Rivian be more attractive to well-heeled truck buyers who think it's cool enough to justify the price compared to those "fake trucks." They hope: yes. Nobody really knows yet. As for the sedans: the LUCID is gorgeous, truly, inside and out ... and a hell of a lot of fun to drive -- and plenty quick enough with lots of range. It's just really expensive and we don't know anything about reliability or longevity yet. The Tesla broke some new ground design-wise, but their performance pkg vehicles are the really amazing aspect to me now -- like goofily named PLAID model, which has damn near supercar power at the throttle. THAT is fun. Aftermarket suspension can really elevate the handling as well. I guess it's gonna be a while before they have every day customers who aren't wealthy early adopters happy to spend whatever to be coolest kid in school.
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BubbaGump333
04 Feb. 2022
@GearheadInLA where I live, half the vehicles on the road are trucks, and half of those truck owners have work/lifestyles that require a truck. Saving the planet is low on their priority list. Very few of them will buy a Rivian R1T. They MAY buy a Ford F-150 lightening, but only after it has shown reliability, range and convenience equivalent to the gas-burning version.
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Tileman78
07 Feb. 2022
@GearheadInLA
It seems
You didn’t read Rivians award winning recap for Motor Trends truck of the year regarding how it hauled compared to iCE pickups
It seems
You didn’t read Rivians award winning recap for Motor Trends truck of the year regarding how it hauled compared to iCE pickups
truwa
03 Feb. 2022
What happened to the question "is the product is profitable?".Nobody cares I gıuess. But the math is simple : You cannot sell a truck with 135kW highest density expensive battery cells for $70K - $80K (unless you are building the cells yoırself for 50% less). This stock is going under $30 in less than 2 years, each quarter's losses will be a new record. You will see.
Legacy Legends, LLC
03 Feb. 2022
@truwa The stock will probably hit $30 after lock up expires May 2022.
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guugleizevil
03 Feb. 2022
that write up is a garbage - what is the justification for RIVN value at 54 BN right now or LCID at 45BN? they each have Price to Sales of 53K and 63K - so what happens to their valuations when they "scale" or "ramp" or whatever happens - what exactly is the multiple they expect if they get to TSLA's 50BN in sales? are they going to take less than a 17x price to sales? because if the answer is no, then why own them and not TSLA now? Does MS tell us what the fairy dust means in terms of specifics of sales and profit that gets RIVN to $147?these stocks are poster children for retail lunacy - The only thing that would top them is if PTON said they were making a spin bike - EV you could ride to the supermarket and that got it a 40 BN value
Wez
03 Feb. 2022
@guugleizevil
"these stocks are poster children for retail lunacy"Agreed, but it's not just retail, big money is in these stocks and pushing the valuations deep into lunacy...
"these stocks are poster children for retail lunacy"Agreed, but it's not just retail, big money is in these stocks and pushing the valuations deep into lunacy...
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BobbyBellagio
03 Feb. 2022
@Wez interested to see what happens when the lockup period ends around May 9 for rivian
Folger
03 Feb. 2022
@guugleizevil I completely agree with you. Any bullish comment from MS re: RIVN is simply to protect their position in it. RIVN's valuation is absurd, especially in light of the change in sentiment for equities where unprofitable companies are no longer darlings.
Rex Rode
03 Feb. 2022
Was happy to buy LCID for $17 after the first lock up. Rode this train to $55. Just bought back at $26. With so much Saudi money behind LCID practically guarantees success. I will happily start selling though at $40. Always remember, investing is about making money, not being right.
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Entreri
03 Feb. 2022
I wouldn’t buy either at current prices. Rivian at $20-$30 could be a decent spec play.
Zeusy Zeus
03 Feb. 2022
These comments are hilarious… I look forward to my mornings where I drink my coffee and read comments about Rivian and other EV companies on here. When the EV stocks are going down (along with everything else in the market) the bashers are here full force but when they’re going up they’re silent. Everyone’s an expert when the markets trading one single way. Love it 😂I’m not going to preach about Rivian long term because it’s getting redundant at this point if you think EV companies are too risky or not good don’t invest in it. It’s that simple. Coming on here and bashing it because you probably have stock in Tesla or Ford is just comical at best.
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RealRural
03 Feb. 2022
@Zeusy Zeus Not sure what you are trying to say here. You think all EV stocks will go up and survive? The history of manufacturing autos, tech disruption and consumer tastes all strongly indicate there will be winners and losers in the unpredictable EV space. The hare may lose to the tortoise, the winners may fade and some may struggle but survive and then prosper. Anyone who thinks they have certainty here needs to re-examine their assumptions. The list of bankrupt extinct car companies is extensive and a very cautionary tale.
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BobbyBellagio
03 Feb. 2022
@Zeusy Zeus Nah the Rivian puts be hitting tho.
Zeusy Zeus
03 Feb. 2022
@RealRural Where did I say all EV stocks will go up? I'm simply having fun with the trolls on this website who have nothing better to do than to come on here and bad mouth other stocks (typically because they own rival stock companies). But since we are on the topic... So you think that companies investing billions and billions of dollars are just going to magically disappear at some point if they don't make it? All that R&D and technology is just going to vanish into thin air. Question for you... Say a company like LUCID doesn't survive in the long run what do you think will happen to it? *thinking emoji*
User 52861253
03 Feb. 2022
My winner will be SLDP (Solid Power) - developer and producer of all-solid-state battery technology and proprietary electrolyte materials for Ford and BMW. Rivian might also end up being a customer of Solid Power, along with other OEMs.
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v4255
03 Feb. 2022
I think it is way simpler: MS is an IPO bank for Rivian, so this is where the loyalty lies. This will be at least before the lock up expiry in May. Both companies are overvalued.
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arnold.bird
03 Feb. 2022
“An investment in either company requires a need for long-term thinking and preparation for significant potential volatility”Translation: These stocks are awful. Run, do not walk, to the nearest exit.
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RealRural
03 Feb. 2022
@arnold.bird Or some might translate: Buy on the dips. None of us knows who will win out, truthfully.