Key Points

• Lucid announced a preliminary filing for a reverse stock split.

• Typically, reverse stock splits are done by companies in financial distress.

• Lucid has no immediate threat of being delisted.

• 10 stocks we like better than Lucid Group ›

While all the headlines screamed about Uber Technologies' (NYSE: UBER) partnership with Lucid Motors (NASDAQ: LCID) and Nuro, an autonomous driving technology start-up, and the multimillion-dollar investment between them, there was a separate development that nearly everyone overlooked: a potential reverse stock split.

Let's take a look at what exactly a reverse stock split does, what it doesn't do, and what it means for Lucid investors going forward. Is this a desperate move?

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Fair or foul?

EV maker Lucid announced Thursday that it filed a preliminary proxy statement with the Securities and Exchange Commission (SEC) regarding a special stockholders' meeting to authorize the board of directors to complete a reverse stock split of the company's Class A common stock at a ratio of 1-for-10 (1:10).

Let's break this development down into what it means, and what Lucid hopes to achieve with its potential reverse stock split.

A 1-for-10 reverse stock split simply means Lucid will reduce its outstanding shares by a factor of 10, essentially combining 10 old shares into one new share. The stock price will then be multiplied by 10. In the simplest example, a company with 100 shares with a $1 stock price will reverse split into 10 shares, valued at $10 per share.

It's important to note what this doesn't do, which is change the value of what investors own. While the stock price changes, proportionally to the reduction in the number of shares, the company's market capitalization will remain the same, as will the investors' voting power and position value.

Now to the question on investors' minds: Is this a sign of desperation? Not necessarily, because there are a few reasons that can drive a reverse stock split. It's true that typically a reverse stock split is done by a company in danger of being delisted from major exchanges such as the NYSE or Nasdaq -- both require companies to maintain a minimum share price of $1.00.

If a company's stock price falls below that threshold for 30 consecutive trading days, it receives a deficiency notice and is given a set period to raise its price -- perfect for a reverse stock split. But as we know, Lucid is currently trading at roughly $3.15 per share, and its 52-week low was $1.93 per share. While that's a little close for comfort, especially given the gloomy electric vehicle market currently mitigating tariff impacts, it's not in immediate danger of being delisted.

Lucid's Gravity electric SUV. Image source: Lucid.

There is also potential upside for Lucid's potential reverse stock split, as many companies try to push the price of their stock higher to entice big institutional investors. Many institutional investors and mutual funds have policies against owning positions in a stock with a price below a minimum value -- raising the price could enable more large investors to jump into the company's stock, pushing it higher. This is not what typically happens, but Lucid's goal is to make its stock more attractive to more investors.

What it all means

At the end of the day, the market generally views a reverse stock split negatively. It's often a company in financial distress with a falling stock price and potential to be delisted -- not qualities of a great investment.

Lucid is still burning through tons of cash, it's still slowly accelerating deliveries -- although consistently, as it's turned in seven straight quarters of higher deliveries -- and much of its future hinges on the success of its new electric Gravity SUV and its upcoming midsize platform that will underpin at least three more electric SUVs.

Currently, Lucid has the liquidity to fund operations flawlessly through the second half of 2026, and while the market doesn't tend to favor reverse stock splits, this shouldn't raise many red flags for Lucid investors that they weren't already aware of. Lucid is simply a high-risk, high-reward stock, and big swings in its price are inevitable. Invest accordingly.

Should you invest $1,000 in Lucid Group right now?

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Key Points

• The EV maker has poured money into its Advanced Driver-Assistance System (ADAS).

• The company has leading technology, but no joint ventures yet with others.

• A joint venture similar to Rivian and Volkswagen's could be a huge boost to business.

• 10 stocks we like better than Lucid Group ›

Right now, Wall Street is lukewarm on the electric vehicle (EV) industry, as sales and market share have yet to gain traction at the speed once anticipated.

But at least one EV maker -- Lucid Group (NASDAQ: LCID) -- has proven capable of turning around operations. After years filled with disruptions, delays, and disappointments, the automaker has gained traction and turned in seven consecutive quarters of rising deliveries. It's proven it can design, develop, and launch incredible high-quality vehicles, and that it can attract a major investor: Saudi Arabia's Public Investment Fund (PIF).

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But there's one last thing Lucid needs to prove to Wall Street -- that it can package its technology and generate revenue from it, much like competitor Rivian Automotive has done with Volkswagen.

Look, hands-free!

Lucid's vehicles are using over-the-air (OTA) software updates to become even more capable and more advanced. That's great news for the automaker, which claims to have the best EV technology. Starting later this month, July 30 to be exact, Lucid Air owners will get access to new features through an OTA update that includes Hands-Free Drive Assist and Hands-Free Lane Change Assist.

It's the latest sign that Lucid is continuing to pour capital into Advanced Driver Assistance Systems (ADAS). Kai Stepper, Lucid's vice president of ADAS, noted that the update "offers a glimpse into the future that Lucid is building."

While these new systems might seem like buzzwords to investors, they certainly aren't to be brushed aside and can generate revenue in multiple ways. Consider that Lucid's DreamDrive Pro is an optional ADAS system that includes visible-light cameras, ultrasonic sensors, LiDAR, and surround view cameras, among others, for a small price of $950 plus tax.

But what should really interest investors is whether Lucid can sell its software and technology stack to a major manufacturer for mass production in their vehicle lineup. That's exactly what Rivian was able to do with its partnership with Volkswagen.

Lucid Gravity. Image source: Lucid Motors.

Show me the money!

Rivian formed a joint venture with Volkswagen Group in a deal worth up to $5.8 billion, and potentially more, which combines the strength of Rivian's cutting-edge software stack and electronics architectures and the scale of Volkswagen's production and vehicle platforms. But the biggest takeaway is that there are very real global automakers that have failed to develop solid technology stacks, and Volkswagen finally decided to ask for help.

This is a big deal -- not only for Rivian's cash position, but because it also gets Rivian's technology and products in front of incredible numbers of people in Volkswagen vehicles that span all relevant vehicle segments.

Lucid has proven that it's capable of developing an incredible vehicle. Management noted recently that many of its new customers are coming directly from Tesla, as that company deals with backlash and people are looking for a high-quality and advanced replacement option. Lucid has proven capable of launching vehicles and accelerating production, which the electric Gravity SUV is currently going through the process of as of this writing.

But what Lucid has yet to do is prove to Wall Street that it can package its technology stack and sell it to customers such as Volkswagen. It's one of the few hurdles which remain for a company that appears poised to have a strong finish to 2025 despite a sluggish EV market and uncertainty regarding tariffs.

Investing in Lucid comes with immense risk, but if the company can create a joint venture similar to Rivian's, the automaker's future will be very bright.

Should you invest $1,000 in Lucid Group right now?

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Key Points

• Uber will take 20,000 Lucid vehicles with driverless technology for a robotaxi service.

• Uber's service will start late next year; a Lucid-Nuro prototype is already in testing.

• Lucid's reverse stock split, if completed, likely won't be well received by the market.

• 10 stocks we like better than Lucid Group ›

Don't look now but Lucid Motors (NASDAQ: LCID) just received another boost of momentum, shooting the stock over 40% higher Thursday. The driving force behind its move higher was blasted across headlines: Uber Technologies (NYSE: UBER) to invest $300 million in Lucid to form robotaxi partnership. The great news for investors is that aside from the phenomenal opportunity it presents, is that it could be the last thing it needs to prove to Wall Street. More on this in a second.

But don't overlook the second announcement Lucid made Thursday regarding a potential reverse stock split. Let's dive into both developments and what they mean for investors.

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Show me the money!

Uber is the driving force behind this three-headed monster partnership. The deal calls for a new robotaxi service that will take an industry-leading, software-defined vehicle of Lucid's new Gravity SUV, infuse it with Nuro's level 4 autonomy system, and deliver a robotaxi service using Uber's vast global network and fleet management.

Uber is targeting a fleet of 20,000 or more Lucid vehicles over the next six years, and the first Lucid-Nuro robotaxi prototype is already operating autonomously on a closed circuit course at Nuro's Las Vegas operations.

Lucid, Uber, and Nuro's robotaxi prototype. Image source: Lucid Motors.

This deal is big news for Lucid, and the 20,000 vehicles evenly spread over six years is still massive considering the automaker delivered just under 6,500 vehicles for the first half of 2025 and hopes to deliver roughly 20,000 for the full year after accelerating production for the Gravity SUV as we speak.

But this development goes beyond the vehicle demand, and it goes beyond the liquidity Uber's $300 million investment represents. This could finally prove to Wall Street that Lucid not only has the advanced technology needed to produce high-quality vehicles but demand for its technology from other companies.

Lucid investors should have been insanely jealous when rival EV maker Rivian inked a partnership with Volkswagen to supply the former's technology and software stack for use in Volkswagen vehicles in a deal worth $5.8 billion.

"This investment from Uber further validates Lucid's fully redundant zonal architecture and highly capable platform as ideal for autonomous vehicles, and our industry-leading range and spacious well-appointed interiors, as ideal for ridesharing," said Marc Winterhoff, interim CEO at Lucid, in a press release. "This is the start of our path to extend our innovation and technology leadership into this multi-trillion-dollar market."

Reverse stock split?

Another development that was mostly overlooked thanks to the bombshell Uber and Nuro partnership, perhaps by public relations' design, was that Lucid filed a preliminary proxy statement with the Securities and Exchange Commission (SEC) to enact a special stockholders' meeting to authorize a reverse stock split of the company's class A common stock at a ratio of one-for-ten (1:10).

Essentially, Lucid will consolidate its shares, and investors will receive one new share for every 10 of the old shares, and the price per share will multiply by 10. The value investors own is the same, and Lucid's market capitalization won't change; it'll simply boost the trading price of Lucid shares.

Generally, a reverse stock split is not looked at favorably by the market, and oftentimes it's a company in financial distress, with a falling stock price and in danger of being delisted by a major stock exchange. In this case, with Lucid trading above $3 currently, the company isn't in immediate danger of being delisted as it would need to trade below $1 for 30 consecutive trading days.

For Lucid, this is simply an attempt to make its stock more attractive to large investors that often have a minimum stock price they're allowed to invest in. Many institutional investors and mutual funds have this.

What it all means

Thursday was a very good day for Lucid. It proved it can package its technology for new revenue streams and inked a highly valuable investment worth $300 million from Uber, all while getting its product out in front of more and more consumers. This is exactly the type of deal Lucid investors were hoping for even if it isn't nearly as lucrative as Rivian's joint venture with Volkswagen. Furthermore, while the market generally disapproves of reverse stock splits, Lucid's doesn't appear to raise the typical red flags.

As always, Lucid remains a high-risk, high-reward stock, and it isn't for the faint of heart as big swings such as Thursday's are sure to take place over the next few years.

Should you invest $1,000 in Lucid Group right now?

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

Key Points

• QuantumScape has installed the Cobra process as its new manufacturing baseline.

• Cobra will demonstrate the company's ability to produce cells at a near-commercial pace.

• QuantumScape's partnership with Volkswagen subsidiary PowerCo will be instrumental in its plan to progress toward commercial production scales -- and revenue.

• 10 stocks we like better than QuantumScape ›

When looking at the risk vs. reward balance, QuantumScape (NYSE: QS) might offer the wildest range of any company out there. QuantumScape is hard at work developing its technology for solid-state batteries -- a type of battery that no company has produced at commercial scale for the electric vehicle (EV) market yet. If it succeeds, it will be a game-changing breakthrough for EVs, but for now, the company lacks not only profits, but any commercial revenue at all.

That should change in time, but what should matter to investors is that QuantumScape is installing all of its new equipment for new processes to reach commercial production volume. And on that front, QuantumScape is making sound progress.

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In late June, the company announced a major milestone in its scale-up effort: the successful integration of its Cobra separator process into baseline cell production. Cobra is its next step toward commercialization, and the process enables faster and more energy-efficient production. QuantumScape noted that the process treats key battery cell components 25 times faster than earlier processes, and with a fraction of the equipment and operational footprint.

Image source: QuantumScape.

The Cobra process will replace the company's previous process, dubbed Raptor, which was used for sample cells and B0 cell production. Essentially, part of this development is demonstrating that QuantumScape's improved manufacturing process will work on a fast-paced assembly line.

"Cobra is a step-change innovation in ceramic processing, enabling a major improvement in productivity compared to Raptor -- which was already a considerable advancement compared to the previous generation," said QuantumScape co-founder and Chief Technology Officer Tim Holme in a press release. "This advancement is central to bringing our high-performance solid-state battery platform to market at gigawatt scale."

The announcement of that milestone was almost solely responsible for the company's 29% surge during the first half of 2025, but where is QuantumScape likely to go during the second half?

What's next?

While QuantumScape works on newer iterations of Cobra to inch closer to commercialization of its solid-state batteries, the next step for the company is already in the works. But to put that in context, we have to rewind to almost exactly one year ago, when it announced a partnership with Volkswagen Group's battery company, PowerCo.

Essentially, that partnership deal says that after the battery start-up makes satisfactory technical progress, then -- in exchange for royalty payments -- QuantumScape will grant PowerCo a license to mass-produce battery cells for EVs based on its technology. The deal will combine QuantumScape's technical innovations with PowerCo's extensive and high-quality production operations.

QuantumScape's next goal is to begin shipping QSE-5 B1 samples, and it remains on track to do so. Those are the cells it will use to show how its tech works in real-world applications, and the B1 version is expected to be distributed for the testing phase of its launch program next year.

QuantumScape stock is not an investment for the faint of heart. Anyone who buys it has to accept the considerable level of risk that comes with a company that is years away from generating revenue through the commercial manufacture of its core products. That said, QuantumScape has slowly but surely progressed, implementing each new process and hitting each new milestone on schedule. As the company continues on its quest to manufacture the "holy grail" of EV batteries, we can expect the hype train to chug forward every time it improves its Cobra process significantly.

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Key Points

• Ford's employee pricing campaign lured in the customers.

• Following employee pricing is another incentive push.

• The model you want might not be included.

• 10 stocks we like better than Ford Motor Company ›

If you follow Ford Motor Company (NYSE: F), or perhaps the auto industry in general, you've likely heard about Ford's "From America, For America" campaign offering employee pricing discounts on select 2024 and 2025 models during the second quarter. The deal that helped drive solid results for the company. (More on this in a second.) That incentive is officially over, right as broader auto sales are expected to slump due to tariff effects.

But fear not -- there's good news on another upcoming incentive. Let's look at the results from Ford's employee discounting and what to expect going forward.

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Ford's Mustang Mach-E. Image source: Ford Motor Company.

Everyone loves employee pricing

If investors were counting on employee pricing discounts to bring in consumers, it delivered. As customers cashed in on the incentive campaign, so did Ford, with second-quarter U.S. light-vehicle sales rising 14%, compared to the prior year. That 14% gain was about 10 times the estimated 1.4% industry increase. Furthermore, Ford's market share jumped 1.8 percentage points.

"We blew the doors off the overall industry with our second-quarter sales," Andrew Frick, president of Ford Blue and Model e, said in a press release.

Now, with Q2 in the books, analysts generally expect a slump in automotive sales in the U.S. in the second half of 2025 as tariff effects begin to filter through the industry. We're already seeing some effect, especially on electric vehicles (EVs).

After Ford announced in May that it was raising the price on the Mach-E, which is built in Mexico and subject to tariffs, sales of the vehicle dropped 20% during Q2. Ford's F-150 Lightning and E-Transit sales were down 26% and 88%, respectively. But the good news for Ford investors is that the automaker isn't simply ending incentives, of course. It has the second part of its one-two punch coming.

What's the catch?

Ford begins the third quarter with most Ford and Lincoln models offering no-interest financing for 48 months, no money down, and no payments for the first 90 days. The deal runs through Sept. 2.

It's a strategic move. Ford believes that people have seen increasing costs in other parts of their lives, including higher mortgage rates. Management thinks that forgoing an up-front down payment will enable people to purchase a new vehicle.

Now, there is a small catch for customers and, indirectly, investors. Ford did note that the third-quarter incentive excludes the 2025 Bronco Sport, Expedition, Maverick, Ranger, Transit, Super Duty, and Lincoln Navigator. It also excludes the 2024 Maverick, Ranger, Transit, Super Duty, F-150 Lightning, and Mustang Mach-E, as well as both year models of the high-performance Raptor.

What it all means for Ford investors

A potential catch for investors is that these incentives can erode profits if done irresponsibly. We haven't seen the industry in "bad incentive spending" mode in a long time, and that shouldn't be a concern here, either.

Ford's upcoming incentive campaign is good news for investors after it just finished a strong employee pricing campaign that drove sales and market share higher. This also shows that Ford is in tune with its dealership network -- ask Stellantis how important that is -- and that it's attempting to offset what is expected to be a weaker second half of the year. It's all just a little good news for an automaker's stock that has failed to gain traction with Wall Street.

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Tesla's (NASDAQ: TSLA) challenges have been numerous in 2025, and investors can be forgiven for wanting to take a mulligan and perhaps redo the past six months. The electric vehicle (EV) maker is facing sales declines in key markets, backlash from consumers due to CEO Elon Musk's political antics, and another massive price cut from BYD in China, among other headwinds.

Finally, some good news for Tesla investors to chew on: driverless vehicle testing and Musk's political exit.

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Robotaxi testing

Tesla might really be doing this whole robotaxi thing, after years of overpromising on its strategy to eventually derive most of the company's value through its Robotaxi ambitions.

In fact, it may already be happening under our noses. According to CEO Elon Musk via his X account, Tesla has been testing self-driving Model Y vehicles with no one in the driver's seat for several days on the public streets of Austin, Texas. This isn't exactly news, considering Tesla promised to launch the robotaxi service in June, but nobody would blame investors for being skeptical the automaker would once again fall short of expectations.

More specifically to the launch of driverless technology, Tesla will do a slow rollout, with plans to geofence its vehicles to the "safest" parts of Austin. It will initially start with a few Tesla-owned Model Ys before planning to grow to roughly 1,000 vehicles within a few months.

Tesla investors will be holding their collective breath during the initial rollout because the danger is real, competitors and critics are watching, and the stakes are high. Remember, General Motors invested billions into its Cruise driverless vehicle subsidiary before throwing in the towel after a pedestrian incident (among other challenges).

Tesla Cybercab. Image source: Tesla.

There's at least one person in Tesla's corner, however. "There will be many setbacks, but given its unmatched scale and scope globally, we believe Tesla has the opportunity to own the autonomous market," said Dan Ives, an analyst at Wedbush Securities, according to Automotive News. "The march to a $2 trillion valuation for Tesla over the next 12 to 18 months has now begun."

Back to work

No, this subhead isn't regarding remote workers moving back to the office, but rather the company's controversial CEO exiting his role with the Trump administration. Musk is allegedly back to working 24/7 and sleeping at the Tesla factory.

On May 28, Musk again took to his X account to thank President Donald Trump for his time working with Department of Government Efficiency, or DOGE, and a White House official confirmed with Reuters the information, adding, "Off-boarding will begin tonight."

As much of the consumer backlash, protests, and brand defections were driven by Musk's political antics, investors should be thrilled to hear this adventure is coming to an end. It's likely to blow over in time. At the end of the day, 2025 still brings many challenges for the automaker facing sales adversity for essentially the first time, but these two developments were at least a breath of fresh air for Tesla investors tired of taking in the bad news.

While Tesla might look like a buying opportunity right now, and it very well could prove to be long-term, investors would be wise to wait and see the direction of the company first. Currently, it feels like a company torn between manufacturing cars, ramping up robotaxi business, or developing artificial intelligence (AI) and robotics.

Either way, stay tuned: Tesla's story is still in the early innings.

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Unless you've been purposely avoiding the news, you've surely heard about the Trump administration's tariffs. While Trump has used tariffs as bargaining chips and to influence foreign policy, the auto industry has been concerned that it could see raised prices, reduced sales, and less profit.

For Rivian Automotive (NASDAQ: RIVN) investors, there's a little bit of good news on the tariff front and with one strategy it used to offset some of the tariff headwinds.

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Image source: Rivian.

Relief is coming

The first bit of good news for Rivian investors is the Trump administration's tariff relief. Currently, there's a 25% tariff on imported vehicles, and a 25% tariff on vehicle parts that began on May 3.

A couple of executive orders are expected to provide some relief for the automotive industry. Essentially, for a vehicle with 50% imported parts, the automaker would only have to pay tariffs on 35% of the vehicle for the first year. The rebate is then lowered in year two and then phased out. That means that a vehicle with 85% domestic parts will avoid tariffs during the first year – it should be noted 85% is a high percentage of domestic parts.

A separate executive order noted that automakers would pay only up to a 25% tariff on a vehicle and its parts, and would not have to pay additional import taxes on aluminum and steel used in the vehicle, or because it was imported from Canada or Mexico.

While the relief is welcomed, not everyone thinks it's hugely helpful. One such person is Dan Ives, managing director of autos at Wedbush Securities, according to the Detroit Free Press: "It's akin to having a car accident and saying, 'Oh good, it's not totaled, but it's still $20,000 worth of damage.'"

Rivian's quiet gamble

In a strategic move, Rivian quietly began building a reserve of electric vehicle (EV) batteries from Asia ahead of the Trump administration's tariffs. The small gamble is paying off and gives the company a little insurance against the tariff pressure being applied on the entire automotive supply chain.

Rivian even acquired a supply of lithium-iron phosphate cells from China's Gotion High-Tech Co. before the U.S. election and more recently worked with cell supplier Samsung SDI to move a substantial amount of battery inventory to the U.S. from South Korea.

Ultimately, the moves should help ease potential supply chain complications and costs from the tariffs, but it won't last forever. Rivian will have higher domestic parts usage than mainstream automakers, such as Ford Motor Company and General Motors, but the tariffs on parts will still sting the automaker.

What it all means

The tariff relief, even if not as helpful as investors would like, is welcomed by the automotive industry, and Rivian's foresight to stockpile battery supplies ahead of the tariff announcements was a smart move to help offset some of the near-term costs. It's important, because the battery cells that Rivian uses from vehicle electrification specialist Gotion largely go in its commercial delivery van, primarily for Amazon.

But 2025 is still setting up to be a lackluster year for Rivian as sales for its R1 vehicles seem to have peaked, and the launch of its R2 model -- more modestly priced to appeal to a larger swath of customers -- won't happen until 2026, and it can't come soon enough.

Should you invest $1,000 in Rivian Automotive right now?

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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Investors knew 2025 could be a slow year for Rivian Automotive (NASDAQ: RIVN). The company's next vehicle launch, the highly anticipated R2, won't hit roads until 2026, and the company lacks any real visible catalysts. The good news for investors is that the automaker is finally gearing up to do a big marketing push, and it should provide a boost to stagnating sales.

What's going on?

Rivian's customers are passionate and invested in the brand, even though it's a relatively small player in the electric vehicle (EV) market. Independently run Rivian Clubs of America are in 35 states and Washington, D.C., and Rivian plans to tap into its passionate consumer base for its first big marketing campaign.

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The campaign, called "Real Rivian Adventures," takes real stories from real Rivian owners and turns them into advertisements. One example, an advertisement called "Last Lemonade Standing," was conjured from a Rivian owner's Facebook post and has a neighborhood boy using a Rivian outlet to blend lemonade slushies to outdo a competing stand.

According to Denise Cherry, Rivian's vice president of marketing, it's the first ad in a series spotlighting owner stories that will include streaming services, social media, and possible buys on broadcast TV.

Rivian's R1T. Image source: Rivian.

Needing a spark

Rivian's marketing push comes at a good time considering its sales have been lackluster in 2025. In fact, first-quarter sales declined 36%, driven lower by fewer commercial van deliveries and weak demand, partially due to the impact of L.A. fires in a crucial California EV market. Rivian reaffirmed its full-year delivery guidance of 46,000 to 51,000 vehicles -- roughly in line with the prior year's 51,579 deliveries.

Data source: Rivian press releases. Chart by author.

The upcoming R2, R3, and R3X will open the door to a more mainstream consumer thanks to their lower price tag. Rivian R1T and R1S start at roughly $70,000 and $75,900, respectively, but the R2 price tag will check in around $45,000.

"We are hyper-focused on how we start to ramp our awareness, get our brand out into the hearts and minds of consumers ahead of that release," Cherry said in an interview, according to Automotive News.

What it all means

2025 was to be a quiet year for Rivian, but the move to shake things up and grow brand awareness with a big marketing push could deliver just the spark Rivian's sales need. Further, increasing brand awareness ahead of the R2 launch is a big step forward for the company.

Rivian really needs to the R2 to be a hit with consumers, provide a spark to sales, and hopefully increase the company's scale with additional production volume. The good news is that the R2 is on track for its launch date, and the company has made construction progress on its Normal, Illinois plant, which will be the first place the R2 is produced. Once construction finishes, the plant will be able to produce 215,000 vehicles annually, up from the status quo of 150,000 vehicles.

Rivian remains a highly speculative and risky stock to own, and it should remain a small position in any portfolio. But if the R2 is a big hit, 2026 should be a strong year for the young EV maker.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Daniel Miller 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.

If you listen to the general narrative in the automotive industry, it's a dire one that warns of highly affordable and advanced Chinese electric vehicles (EVs) sweeping the globe in dominating fashion. There's certainly a lot of truth to that narrative, but many promising EV companies in China are busy battling themselves amid a brutal price war.

Nio (NYSE: NIO) is included, and despite the ongoing Chinese price war, the company has a couple of reasons for investors to remain optimistic.

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Profitable battery swaps?

For many investors, it feels like a double edged sword when it comes to Nio's battery swap ambitions. On one hand, it gives the company a unique competitive advantage since it has built out a leading battery-as-a-service network. On the other hand, it's quite an expensive endeavor for a company burning cash as profits remain in the distance.

There are positive signs for the battery-swap strategy. Only recently, Nio saw demand for these services spike to a record high 136,720 swaps in a single day on Feb. 3. The period from Jan 28 to Feb. 4 was China's New Year Holiday, with travel peaking before and after the dates. Between Jan. 22 and Feb. 5, Nio provided over 1.7 million battery swaps, a strong 44% increase compared to the prior year.

There are also signs that its customers prefer the option once they've tried it. During the previously mentioned time frame, 83.2% of the power added by Nio users on the highway came from battery swap stations. The even better news: This chunk of Nio's business and capital expenditures could break even by the end of 2026, according to a team at Chinese brokerage Western Securities.

The problem with Nio's battery swap business currently is that there simply isn't enough volume of swaps to generate enough revenue to cover day-to-day operations. According to Chief Financial Officer Stanley Qu, a battery swap station can break even if it serves 60 to 70 motorists a day. That's exactly what should happen, according to the analyst team. As new brands and new models ramp up in production and deliveries, more Nio users will use the battery swap technology.

A path to doubling sales

Nio has come a long way since launching the first ES8 premium SUV in 2018. The company now sells a list of options under its premium brand Nio, and began deliveries of its second brand, Onvo, late in 2024. Its third brand, Firefly, is set to begin deliveries in 2025 while continuing to accelerate production throughout the year.

Its second and third brands are intended to open the door to a much larger addressable audience with lower price tags. Management said on last November's earnings conference call that it was confident it could double sales in 2025 while still targeting 2026 for profitability.

That means Nio expects to deliver roughly 440,000 vehicles in 2025 on the backs of its newest brands and models. Not only would that do wonders for Nio's revenue, but the additional production capacity being used would also help the company's gross margin -- something that would be greatly appreciated by investors amid a brutal price war in China.

Is Nio a buy?

Nio has always been a compelling and unique option, thanks in part to its leading battery-swap network. The company's premium Nio brand has been well received, and its two newest brands, Onvo and Firefly, are poised to help double deliveries this year.

But the stock has shed 80% of its value over the past three years, the company is burning cash, and it faces a price war in China and tariff uncertainty overseas.

There's a lot of risk that comes with investing in companies such as Nio, but a lot of upside as well. Nio should always remain a small position in any portfolio, but despite a slow start to 2025 the company should begin succeeding on all its plans sooner, rather than later.

Should you invest $1,000 in Nio right now?

Before you buy stock in Nio, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nio wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

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Daniel Miller 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.

It's been a wild ride for investors in Rivian Automotive (NASDAQ: RIVN) and Nio (NYSE: NIO), filled with ups and downs. Both companies have previously had solid momentum behind them, and faced headwinds, setbacks, or disruptions. Both also still have much to prove to investors.

One analyst recently cast doubt on Rivian's gross profit, and Nio will need to show that it can offset the effects of China's brutal price war. Let's dive into both electric vehicle (EV) makers below and see what may lay ahead for them.

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Gross profit in doubt?

One of the biggest takeaways from Rivian's fourth quarter was that it achieved $170 million in gross profit, which is simply total revenue minus the cost of revenue. It was a sizable win compared to analysts' estimates of $49 million in gross profit and was the company's first quarterly gross profit in its short history.

While the company certainly made progress -- Rivian's cost of revenue dropped 18.6% while revenue spiked 31.9% higher -- there was a small drawback. That came in the form of sharply higher sales of regulatory credits, which added $299 million in revenue during the fourth quarter. Regulatory credits are awarded to automakers that produce and sell electric vehicles, and the excess can be sold to other automakers that need the credits to meet emissions standards.

Rivian expects sales of regulatory credits to be similar for 2025 and guided for a positive gross profit for the full-year. Doing so would be a big step toward proving to investors that it has a path to profitability.

At least one analyst disagrees with Rivian's management. Bernstein's Daniel Roeska warned that the company may fail to reach that goal until 2027.

It's true that Rivian will face challenges. Its delivery growth has stalled, so much of the automaker's gross profit improvement will come from a reduction in revenue costs. The company lacks a revenue catalyst, with the R2 not set to hit the roads until the first half of 2026.

Gross profit will be something that analysts and investors both focus on throughout 2025, and it would go a long way if Rivian could achieve its full-year positive gross profit.

Where art thou, revenue growth?

Meanwhile, Nio is expected to see strong momentum throughout 2025, driven by two new brands, Onvo and Firefly. In fact, during Q4, the company's deliveries broke down to 52,760 from its premium Nio brand and 19,929 from its Onvo brand. As deliveries of both Onvo and Firefly accelerate it is expected to drive strong revenue and delivery growth, but that didn't materialize quite as expected during Q4 with Firefly only having just launched.

Nio's Q4 deliveries were up 45% compared to the prior year, but its total revenue jumped a much lesser 15.2%, suggesting that the exhaustingly brutal price war in China is having a large effect on its pricing power.

Nio's first-quarter deliveries were in line with management's guidance at 42,094. But investors must remember the disappointment from that guidance, as it fell far short of analysts' original expectation of 65,000 in deliveries.

Information source: Nio delivery press releases. Graphic source: Author.

Something to prove

Over the past three years, Rivian and Nio have shed 70% and 82% of their value, respectively, and both certainly have much to prove to investors on their way toward profitability. It won't happen overnight, but if Rivian can achieve full-year 2025 gross profit, perhaps even with less reliance on regulatory credit sales, and Nio can offset the weight of China's price war, both will set themselves up for a much brighter future.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of April 21, 2025

Daniel Miller 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 markets received good news when it was announced that President Donald Trump would pause reciprocal tariffs on most countries for 90 days and is opting to implement a base 10% tariff on most goods. Automakers, however, didn't catch a break as the pause didn't extend to the 25% duty on vehicle imports.

Worse yet, the automotive industry is expected to get slapped with an additional 25% tariff on automotive parts next month. The problem for General Motors (NYSE: GM) investors is that this could force the company to change one thing it's done really well recently: buying back shares.

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Share buybacks

When it comes to share buybacks, General Motors has been in overdrive, eating up shares in recent years. Between 2023 and 2025, GM announced $16 billion in share buybacks, and it's had a significant impact on how the stock has traded. That's a huge amount when you consider that the Detroit automaker has a market capitalization of $45 billion. As GM started buying back large amounts of shares, you can see the impact on the stock price.

GM data by YCharts

The trend continues as GM just announced recently it approved a $0.03 per share increase to the dividend, or a 25% hike, and also a new $6 billion share repurchase authorization. Further, the automaker began an accelerated share repurchase program to execute $2 billion of the authorization in the near term.

Turbulent tariffs

Unfortunately, General Motors is perhaps the worst of its domestic peers to get hit by Trump's tariff plan. While it was recently announced that the reciprocal tariffs would be paused for most countries for 90 days, in favor of a base 10% tariff on most goods, the automotive tariffs were not included in that pause.

The reason behind GM's looming tariff pain is that while the company produces more than half of the vehicles that it sells in the U.S. domestically, only about a third of its vehicles are produced using American parts. That might not sound like a big deal, but take it from JPMorgan analyst Ryan Brinkman:

We estimate GM imports ~$56 billion of vehicles annually from Mexico and Canada, which after adjusting for content originating in the U.S. may amount to ~$38 billion--subject to a ~$10 billion tariff under a 25% rate .... For parts, we estimate GM's share of the ~$92 billion imported by the industry may be ~$4 billion, implying a total tariff exposure of ~$14 billion before coping mechanisms.

GM's larger reliance on imports and parts created significant downside, causing Brinkman to lower his GM price target by $11, down to $53 per share. GM was trading at roughly $44 Thursday morning.

What it all means

The impact from tariffs shouldn't be underestimated and could become crippling, and it puts GM in a tough position. One option is to pause the share buybacks to conserve cash, or in a show of strength it could press on with its accelerated purchase program. Your guess is as good as mine what GM will do, and management has mentioned the company is exploring several options to mitigate tariffs.

For investors, however, the pause of reciprocal tariffs is an example of how quickly these developments can reverse course. As crippling as these tariffs may be in the near term, it would be wise not to make any knee-jerk reactions, and over the long term GM will almost certainly continue returning significant value to shareholders through share buybacks.

Should you invest $1,000 in General Motors right now?

Before you buy stock in General Motors, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and General Motors wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Miller has positions in General Motors. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Detroit automakers can run but they can't hide from the potentially devastating impacts tariffs could have on their business. The stocks have been hammered all year long, some worse than others, and the true impact is yet to be felt.

Amid the slew of analyst downgrades and lowered price targets there's a reality that is setting in for some investors: Tariffs could cause Ford Motor Company (NYSE: F) to alter how it returns value to shareholders. In other words, Ford may be forced to cut its coveted dividend.

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Lucrative dividend

Ford has no doubt faced its share of challenges lately. The company is working to cut costs at the same time it's attempting to improve quality issues that have dinged the company's bottom-line through warranty costs. It has challenges in a tough Chinese market, and it's also burning through billions of dollars churning out each electric vehicle at a loss currently.

Throw in the potential impact of tariffs and it's not farfetched to think that Ford may have to cut its lucrative dividend, which remains one of the largest reasons to own the stock. Ford's current dividend yield sits at a lofty 7.8% due to the stock's sell-off, and trades at a paltry price-to-earnings ratio of 5.8.

"It is time to confront some hard truths, once more: vehicle tariffs have commenced, and parts tariffs are likely to follow within a month," wrote Bernstein analyst Daniel Roeska, according to Barron's. "We extend our company analysis to Ford and find significant downside not priced by the market yet."

He could be exactly right when it comes to the downside not being priced into Ford stock yet. As you can see in the graph below, likely thanks to having more production capacity located in the U.S., Ford's stock has shed less value than its competitors so far in 2025.

TSLA data by YCharts

The good news is that Ford shouldn't have to cut the dividend right away, as the company has ample liquidity to wait and see if the tariff drama ends in the near term, one way or another. In fact, you can see in the graph below that Ford has steadily improved its cash position and can easily cover the dividend.

F Cash and Equivalents (Annual) data by YCharts

How costly could it be?

The pain from the tariffs won't be completely felt through the 25% tariff on imported vehicles, but rather next month when another 25% tariff is expected to be slapped on imported automotive parts. For example, Ford produces about 82% of its U.S. sales domestically, but only about a third of its cars are built using domestic parts.

The cost could end up being significant. J.P. Morgan analyst Ryan Brinkman wrote in a note to investors that the current tariff proposals could cost Ford around $6 billion -- rival General Motors fared worse with his estimated cost reaching around $14 billion.

If there's anything to take away from this assessment, it's just how serious these tariffs could be. Not only could they affect Ford's bottom line, but if the tariff pain is extended long-term it could jeopardize the company's lucrative dividend.

With that said, if the dividend is a core part of why you're considering owning shares of Ford, understand that it will always be a focus for the company. Even if it is temporarily cut to mitigate tariff costs, it will one day reach its full potential again as management is committed to returning value to shareholders in that manner.

Should you invest $1,000 in Ford Motor Company right now?

Before you buy stock in Ford Motor Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ford Motor Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.

Given how much news is swirling about this month regarding tariffs, you have likely heard about the 25% tariffs that the Trump administration slapped on all imported vehicles that began last week. On top of those steep import taxes, next month is scheduled to bring another 25% tariff on all automotive parts shipped in from outside the U.S. market.

It's a huge move, and potentially a very costly one for the automotive companies and for their customers. It has shaken the industry and sent many automotive stocks spiraling downward. Well, all except for one or two, including the often-overlooked Ferrari (NYSE: RACE).

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How's it looking?

It takes only a glance at year-to-date stock prices to see how devastating the tariff announcements have been.

Data by YCharts.

Investors might have thought Ferrari would be one of the hardest hit since the 25% tariff slapped on its imported ultra-luxury vehicles would be a much bigger chunk than, say, an average mainstream $40,000 vehicle. After all, this is the car company that produces the F80, which retails at a staggering $3.9 million before options!

While that's true, investors also have to consider context. That context is that Ferrari's typical consumer doesn't really have money issues. It's the driving force behind the stock's resiliency during a recession, since those consumers are less affected by such downturns and continue buying Ferraris regardless of the economic outlook.

Also weighing in its favor is that the company focuses on very strict exclusivity, going as far to limit the number of vehicles it sells to keep demand high and prices strong. You can see the pricing strength as recently as the fourth quarter when the number of Ferraris sold increased a modest 2% but its revenue jumped 14%. The average vehicle sold cost more than $500,000.

More good news

Even better, Ferrari's outstanding pricing power filters down to the bottom line as well. Operating profit jumped 26% year over year during the fourth quarter while earnings per share jumped a significant 32%. Ferrari is a cash-printing machine, but it's also incredibly consistent with revenue gains over the years, as you can see below.

Data by YCharts.

Even the slight dip caused by the pandemic didn't last for long. Ferrari historically trades at a premium, and rarely will investors get an opportunity to buy at a discount. But even so, the company launched a $2 billion share-buyback program in 2022, which suggests management believes it may still be undervalued.

To put in perspective how powerful Ferrari's pricing and margins are, simply compare them to mainstream automakers.

Data by YCharts; TTM = trailing 12 months.

To put it bluntly, not only is Ferrari arguably the best automotive stock to own, it's potentially one of the best stocks to own, period. Over the last 10 years, the stock price has zoomed 627% higher and left the S&P 500's 151% gain in the rearview mirror.

So, when it comes to automotive tariffs, don't be surprised if the automaker once again shows its resiliency and pricing power, since it almost certainly can and will pass the cost on to its lucrative target audience. It's just one more reason owning Ferrari is a smart investment, and even a small 6% dip year to date might be an entry point.

Should you invest $1,000 in Ferrari right now?

Before you buy stock in Ferrari, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ferrari wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.