Key Points
- The termination of federal EV tax credits ahead of schedule has contributed to U.S. EV sales falling 27% year over year in Q1 2026.
- Tesla remains profitable and near its all-time high, while Rivian and Lucid continue to post significant net losses and carry consensus Hold or Reduce ratings.
- Global EV adoption continues to grow, with the U.S. lagging major economies at 10% electric vehicle sales compared to 53% in China and 30% in Germany.
- Special Report: How to own the rails before SpaceX goes public
Between tariffs, geopolitical conflict, and shifting views on psychedelic drugs and cannabis, investors have had no shortage of uncertainty to weigh. But one thing the Trump administration has been abundantly clear about, it is its distaste for carbon mitigation efforts, including renewable energy and electric vehicles (EVs).
Even though they were originally scheduled to run through 2032, the federal clean vehicle credits were terminated for vehicles acquired after Sept. 30, 2025. Without the tax incentive—which saved consumers $7,500 for new EVs and $4,000 for used EVs—sales have stalled.
According to Cox Automotive, in the first quarter of 2026, EV sales were down 27% year over year (YOY). In the fourth quarter of 2025, they were down 36% YOY.
However, around the world, EV adoption rates continue to climb and the future of transportation remains electrified.
Globally, 25% of all new car sales were electric or hybrid last year, with Pew Research Center finding figures as high as 97% in Norway, 71% in Denmark, and 68% in Nepal. In the world’s largest economies, the United States is the laggard at 10%, while China and Germany boasted sales of 53% and 30%, respectively.
Just like the global EV market itself, three major companies operating in the space are each showing disparities that investors should keep on their radar: Rivian (NASDAQ: RIVN), Lucid Group (NASDAQ: LCID), and Tesla (NASDAQ: TSLA).
Despite Clawing Back, Rivian Lacks the Charge to Rival Its All-Time High
Since its year-to-date (YTD) low on May 19, Irvine, California-based Rivian has seen its stock rally about 40%.
But shares of RIVN remain down about 12% YTD and have lost more than 86% since their post-IPO all-time high.
Much of that can be attributable to the company still not operating at a profit.
Last year, Rivian had a net loss of $3.6 billion. Scaling production has dramatically outpaced the company’s revenue growth, but that gap is closing.
A Q1 2026 loss of $416 million shows a dramatic 64% improvement from the company’s seven-quarter high loss of $1.17 billion in Q3 FY2025. The first quarter, however, was helped by a $506 million gain in other income.
The company is still grappling with declining sales in the wake of the discontinuation of EV credits, as well as elevated fixed costs associated with building factories for forthcoming mass-market models. But the biggest hindrance to Rivian’s success remains its global footprint—or lack thereof.
Outside of its limited electric delivery van deliveries, which are used by Amazon (NASDAQ: AMZN) in select European cities, the company currently only sells models in the United States (excluding Alaska) and Canada. Rivian owners who import vehicles into markets outside the company’s current service footprint through grey-market channels may be responsible for shipping them back to North America for warranty repairs or service at their own expense.
The company’s mixed earnings haven’t exactly helped investor sentiment, either. Rivian has missed analyst expectations in three of the last seven quarters, despite revenue beating forecast in all but one of those quarters. Combined with an annual cash burn rate projected to reach as high as $5 billion this year, Wall Street’s outlook is tempered.
The stock receives a consensus Hold rating alongside an average 12-month price target that suggests about 7% upside from current prices.
Lucid’s Price Point Keeps Budget-Conscious From Committing
Another California-based carmaker, Lucid, shares some of the same problems as Rivian.
Unlike Rivian, however, the luxury EV manufacturer does have a notable footprint outside the United States, including markets in Canada, Europe, and the Middle East, with plans to expand in the United Kingdom and into Australia.
But with MSRPs ranging from around $70,000 to more than $250,000, sales have suffered as cost-conscious consumers turn to more affordable electric options, with Lucid struggling to expand its market share.
While deliveries continue to grow those numbers pale in comparison to more dominant EV brands. Lucid delivered 3,093 vehicles in Q1 2026, with Interim CEO Marc Winterhoff noting that the company had "the highest March deliveries in Lucid history, up 14% year-over-year." For comparison, Tesla delivered 1.63 million vehicles globally in 2025.
Lucid is also unprofitable. Last year, the company reported a net loss of $3.68 billion—its highest 2021—with a Q1 loss of $1.13 billion showing its burn rate is on pace with last year’s. In the 18 quarters since its July 2021 IPO, the company has missed analyst earnings expectations in all but three quarters.
With shares are down nearly 50% YTD and almost 75% over the past year, it’s hardly surprising that the stock receives a consensus Reduce rating. However, the consensus price target does suggest more than 80% potential upside.
Tesla Is Quietly Making a Run at Its All-Time High
In the well-documented lead-up to SpaceX’s IPO, Elon Musk-led Tesla’s more than 20% gain from its YTD low in early April has been somewhat overshadowed.
The Magnificent Seven member now finds itself down less than 13% from its all-time high in December 2025, as sales in Europe have rebounded.
Despite having officially lost its title as the world’s largest battery-electric vehicle seller to its Chinese counterpart BYD Limited (OTCMKTS: BYDDF), 2025 marked the sixth consecutive year of profitability for Tesla.
That trend has carried into this year, with Q1 net income of $477 million up nearly 17% YOY. Driving that was YOY revenue growth of nearly 16%, while EPS increased more than 8%.
Challenges remain for the $1.57 trillion market cap company. As Chinese competition continues to test Tesla’s global market share, margin contraction is creating pricing pressure. But, as is often the case, Musk proponents—and Tesla shareholders—focus on longer-term objectives, including the Robotaxi rollout and continued growth in Full Self-Driving subscriptions, which reached nearly 1.3 million in Q1.
Wall Street is proceeding with caution, though. The stock receives a consensus Hold rating, and its average 12-month price target is more than 5% lower than where shares are trading today.
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