Although the stock is very expensive, I’m a big fan. Tesla as a business. Why? Because when it comes to investing in artificial intelligence, it has a dominant advantage (A.I).
Autonomous driving technology, at least as far as consumers are concerned, has so far not lived up to its hype. But artificial intelligence is fast becoming supercharged, according to several experts. Self-driving technologies.
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With billions already invested and billions more promised for additional innovation, few EV stocks will be able to match the scale or speed of Tesla’s autonomy ambitions. Big tech firms, with their big budgets and world-class talent pools, are Tesla’s biggest long-term competitors.
But if I had to pick a pure play EV stock to take on Tesla in the coming years, this would have to be it. Raven Automotive (NASDAQ: RIVN ). And there is an obvious reason for that.
Tesla arguably has the edge when it comes to autonomous driving for two reasons. First, it invested in AI before much of the competition. Second, it controls its means of production. This gives it the rapid ability to innovate, as well as millions of actual miles driven by real-world customers — critical data for improving its models.
Big tech firms like AlphabetGoogle’s parent company still relies on third-party suppliers to build the vehicles that power its Waymo self-driving taxi service. Meanwhile, other pure play EV stocks such as The Lucid Group There are no affordable vehicles in its lineup, which severely limits how many real-world miles its customers can generate.
Right now, Rivian has one of those advantages under its belt. It also invested early in AI. Leadership expects its AI stack to be very vertically integrated, to the extent that it can manufacture its own chips.
And this year, the company expects to begin shipping its first vehicle priced under $50,000. This will give it access to tens of millions of new users, all of whom have the potential to generate meaningful data for the company’s AI models.
When it comes to investing in EV stocks, investors should target companies that have a path to dominance in AI. That means finding companies with clear AI investment strategies as well as the financing necessary to execute on those visions.