Tesla Falls Short, Rivian Surprises

As we kick off the new year, two major players in the EV market, Tesla and Rivian, have shared their Q4 and annual 2024 production and delivery results. The outcomes couldn’t be more contrasting. While Tesla fell short of expectations, Rivian surprised the market by exceeding its targets. Here’s a breakdown of the numbers and how the stock market reacted.

Tesla Stumbles Below Expectations

On Thursday morning, Tesla released its Q4 production and delivery figures, and the results painted a challenging picture. Quarterly production stood at 459,445 vehicles, a 7.74% decline compared to Q3 2023, and 9.59% below analyst expectations of 503,500 units. Deliveries fared slightly better, showing a 2.23% quarter-over-quarter increase, but still missing the expected 512,250 vehicles by 3.37%.

Unsurprisingly, the stock market responded. Tesla shares have fallen 15% since reaching a recent high of $488. By the end of the week, the stock closed at $412.82, reflecting investor frustration over the missed targets.

Rivian Delivers a Surprise

The next day, Rivian presented a starkly different story. Despite facing a production disruption earlier in the quarter due to a shortage of a key shared component, the company managed to exceed expectations.

For Q4, Rivian produced 12,727 vehicles, which, although 37.83% lower than Q3, beat expectations of 10,000 units by a wide margin (21.43%). Deliveries for the quarter reached 14,183, marking a 1.49% increase quarter-over-quarter and exceeding the projected 13,000 units by 8.34%.

The market rewarded Rivian’s performance, especially given its ability to deliver on promises despite challenges. The stock surged 25% in a single day, closing the week at $16.45.

Rivian also reassured investors, stating that the earlier component shortage “is no longer a constraint on Rivian’s production.” This optimistic outlook added to the market’s enthusiasm, signaling that the company is better positioned for growth moving forward.

Shifting Dynamics

Tesla has long been known for its tendency to overpromise and underdeliver. Meanwhile, Rivian is carving out its place in the EV market, proving it’s here to stay. The company has been consistent with its forecasts and is working to build trust with shareholders by delivering realistic results.

One of Tesla’s challenges is saturation. It has already captured a significant share of the market and is struggling to reach new customers. Rivian, on the other hand, is just getting started. With the planned release of its lower-budget R2 model in 2026, Rivian is poised to attract an entirely new customer base.

From a valuation perspective, Rivian offers more bang for your buck. At a current price-to-sales (P/S) ratio of 3.51, it’s a much better deal compared to Tesla’s lofty 14.73. For long-term investors, this could signal an opportunity as Rivian ramps up production and expands its reach.

Are you a Tesla Bull or a Rivian ? Let us know in the comments.