Ford and Rivian Announce Big Developments — but Are They Buys Now?​

Key Points

Ford Motor Company (NYSE: F) and Rivian (NASDAQ: RIVN) 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 iconic automotive 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.

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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 aboard Ford’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.

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.

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 nor Rivian 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.

Should you buy stock in Rivian Automotive right now?

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.