Two of the main electric-vehicle stocks haven’t had a great start to 2026. Year to date, shares of Tesla (NASDAQ: TSLA) are down about 13%, while Rivian Automotive (NASDAQ: RIVN) is off roughly 24% — including a sharp drop on Friday after the smaller automaker’s first-quarter earnings report.
But could sentiment toward these two stocks improve?
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.
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Tesla: margin recovery meets a heavy spending year
Tesla’s first quarter looked encouraging on the surface.
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.
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.
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.
Tesla chief financial officer Vaibhav Taneja told investors during the company’s first-quarter earnings call that Tesla is in “a very big capital investment phase.”
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.
There’s plenty to like here, particularly the margin recovery and continued progress on autonomy.
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.