<p>Two of the main electric-vehicle stocks haven't had a great start to 2026. Year to date, shares of <strong>Tesla</strong> <span class="ticker-mention inline-flex items-center font-bold">(TSLA <span class="ml-1 text-green-900">+3.93%</span>)</span> are down about 13%, while <strong>Rivian Automotive</strong> <span class="ticker-mention inline-flex items-center font-bold">(RIVN <span class="ml-1 text-green-900">+0.35%</span>)</span> is off roughly 24% -- including a sharp drop on Friday after the smaller automaker's first-quarter earnings report.</p>
<p>But could sentiment toward these two stocks improve?<br/><br/>Now's a good time to look at both stocks, as each company has now delivered fresh first-quarter results. Additionally, with both stocks trading well below where they started the year, this is a good time to figure out which is the better growth stock to buy now.</p>
<div><img alt="A Tesla Cybercab." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Njg1NDMvdHNsYS1zdG9jay12cy1yaXZuLXN0b2NrLnBuZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Njg1NDMvdHNsYS1zdG9jay12cy1yaXZuLXN0b2NrLnBuZyZ3PTM4NDA"/>
<p>Image source: Tesla.</p>
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<h2>Tesla: margin recovery meets a heavy spending year</h2>
<p>Tesla's first quarter looked encouraging on the surface.</p>
<p>The electric-car maker's first-quarter revenue rose 16% year over year to $22.4 billion -- a welcome bounce after Tesla's first-ever annual revenue decline last year. Additionally, Tesla's non-GAAP (adjusted) earnings per share jumped 52% to $0.41, helped by a gross margin of 21.1% -- up from 16.3% a year earlier and the company's best quarterly margin in some time.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>But while Tesla's first-quarter deliveries rose 6% year over year, the company built about 50,000 more vehicles than it sold, suggesting there could be a demand issue. And the company's energy generation and storage revenue fell 12% year over year, with deployments dropping to 8.8 gigawatt hours from a record 14.2 gigawatt hours in the fourth quarter of 2025.</p><div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Tesla Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4"/></div><div><h2>NASDAQ: TSLA</h2><div>Tesla</div></div></div><div><div><div>Today's Change</div><div>(3.93%) $16.20</div><div>Current Price</div><div>$427.99</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$1.6T</div><div>Day's Range</div><div>$416.56 - $431.19</div><div>52wk Range</div><div>$273.21 - $498.83</div><div>Volume</div><div>4.2M</div><div>Avg Vol</div><div>62M</div><div>Gross Margin</div><div>19.07%</div></div></div></div></section>
<p>And the bigger surprise was in the company's outlook for its spending. Management said it now expects 2026 capital expenditures to exceed $25 billion -- up from a $20 billion guide just a quarter earlier and roughly triple the $8.6 billion the company spent in 2025. </p><div><div id="in_line_article_pitch_container"></div></div>
<p>Tesla chief financial officer Vaibhav Taneja told investors during the company's first-quarter earnings call that Tesla is in &#34;a very big capital investment phase.&#34; </p>
<p>That spending is being directed toward AI compute, Cybercab, Megapack 3, the Optimus humanoid robot, and an expanding Robotaxi service, now operating in Austin, Dallas, and Houston.</p>
<p>There's plenty to like here, particularly the margin recovery and continued progress on autonomy.</p>
<p>Still, the stock trades about 190 times analysts' consensus earnings-per-share forecast for the company over the next 12 months. Additionally, investors are going to need to exercise extreme patience; CEO Elon Musk acknowledged that Robotaxi revenue won't be material this year.</p>
<h2>Rivian: the R2 finally arrives -- with a catch</h2>
<p>Rivian's first-quarter update arguably wasn't as upbeat as Tesla's. Rivian's first-quarter revenue grew 11% year over year to $1.38 billion, supported by 10,365 deliveries -- up 20% -- and a 49% jump in software and services revenue (much of it tied to the company's joint venture with <strong>Volkswagen Group</strong>). And Rivian's loss per share of $0.33 notably narrowed from $0.48 a year earlier.</p>
<p>But Rivian's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was negative $472 million, and management still expects a full-year adjusted EBITDA loss of $1.8 billion to $2.1 billion. </p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Rivian Automotive Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1JJVk4ucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1JJVk4ucG5nJnc9MTI4"/></div><div><h2>NASDAQ: RIVN</h2><div>Rivian Automotive</div></div></div><div><div><div>Today's Change</div><div>(0.35%) $0.05</div><div>Current Price</div><div>$14.23</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$18B</div><div>Day's Range</div><div>$13.84 - $14.34</div><div>52wk Range</div><div>$11.57 - $22.69</div><div>Volume</div><div>1M</div><div>Avg Vol</div><div>30M</div><div>Gross Margin</div><div>-441.39%</div></div></div></div></section>
<p>The bigger story was the start of production for the R2 -- Rivian's long-awaited midsize SUV.</p>
<p>&#34;I believe the R2 will be a game changer for our customers and will be a key driver of our company's long-term growth and profitability,&#34; founder and CEO RJ Scaringe said during the company's first-quarter earnings call. </p>
<p>But here's the catch: the R2 launched at a starting price of $57,990 -- well above the roughly $45,000 entry point Rivian had advertised for years. A more affordable version isn't expected until late this year. But even that one won't be priced near $45,000. The company isn't planning to launch a $45,000 version until &#34;late 2027.&#34; </p>
<p>Combining all of this with continued cash burn, that dynamic helps explain why shares fell more than 8% on Friday following the report.</p>
<h2>Which stock is the better buy?</h2>
<p>Ultimately, Rivian hasn't yet proven it can build vehicles profitably at scale -- and the latest news from the company doesn't suggest this will change any time soon.</p>
<p>Tesla, by contrast, is generating cash and expanding its Robotaxi footprint. That said, the company expects free cash flow to be negative for the rest of this year as it ramps up its capital expenditures. But the automaker has significant liquidity -- $44.7 billion of cash, cash equivalents, and short-term investments.</p>
<p>Overall, Tesla stock arguably looks like the better choice today. That said, both stocks look risky. Tesla's valuation already prices in big wins from autonomy and Optimus, while Rivian's path to profitability hinges almost entirely on a successful R2 ramp. Investors interested in either name may want to keep position sizes modest.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

TSLA

RIVN

<p>Tesla and Rivian, two electric vehicle stocks, have struggled in 2026, with Tesla down 13% and Rivian down 24%. Tesla reported a 16% revenue increase to $22.4 billion, but raised its capital expenditure forecast to over $25 billion. Rivian's revenue grew 11% to $1.38 billion, but it still faces significant losses and a delayed affordable SUV launch. Overall, Tesla appears to be the better investment option despite risks, while Rivian's profitability remains uncertain.</p>

- Tesla's stock decreased about 13% year to date, despite a 16% revenue increase in Q1, and a significant rise in adjusted earnings per share.  
- Rivian also faces challenges, with an 11% revenue growth, but a significant EBITDA loss and a higher-than-expected price for its new R2 SUV, leading to a sharp decline in its stock.  
- While Tesla appears to be the more promising investment due to its liquidity and ongoing developments, both stocks remain risky with uncertain paths to profitability.

Tesla vs. Rivian: Which Is the Better Growth Stock to Buy Now?