Better EV Stock to Buy: Rivian vs. Nio

Now that electric vehicle (EV) stocks have tumbled from excessive valuations, many people are looking closer at getting exposure to the sector. Rivian Automotive (NASDAQ: RIVN) and China-based Nio (NYSE: NIO) are two popular names with investors.

That's understandable as they both have intriguing characteristics as potential investments. Rivian had a very successful initial public offering late last year and held $17 billion in cash as of March 31. Some of that also came from early investor Amazon, which also has placed an order with Rivian for 100,000 electric delivery vehicles. Nio, which operates in the two biggest global EV markets in China and Europe, already has a large customer base and popular products. So it's worthwhile to look at which would make the better investment right now.

While Nio has a market cap of $32 billion compared to about $24 billion for Rivian, there's good reason for it to be worth more to investors. While neither is yet earning profits, one way to value them right now is with a price-to-sales (P/S) ratio based on expected 2022 sales. And there's a big difference there.

Source Fool.com