Rivalry between Rivian and Lucid: One Reason Jim Cramer Prefers One Stock Over the Other
In a significant move towards autonomous mobility and electric vehicles (EVs), Uber Technologies and Lucid Motors have joined forces, while Rivian and Volkswagen have entered into a partnership focusing on EV manufacturing and platform integration.
Uber's investment of $300 million into Lucid Motors marks the beginning of a long-term commitment aimed at deploying 20,000 autonomous Lucid Gravity robotaxis over six years. This partnership represents a bold step towards penetrating the multi-trillion-dollar autonomous ride-hailing market, providing Lucid with a major new revenue stream beyond luxury car sales. The collaboration is set to leverage Nuro’s Level 4 self-driving technology, with the first vehicles expected to launch in 2026 in a major urban hub.
In contrast, the Rivian-Volkswagen partnership, while not as technology-driven, is a manufacturing collaboration with potentially significant but different long-term strategic impact. The deal primarily involves supplying electric vans and shared EV components, with Volkswagen investing in Rivian, although the exact figures are not specified. The partnership aims to scale EV production and platform capabilities, strengthening Rivian’s manufacturing and Volkswagen’s EV offerings within the broader EV market.
| Aspect | Uber-Lucid Partnership | Rivian-Volkswagen Partnership | |----------------------|----------------------------------------------------|------------------------------------------------| | Investment | Uber investing $300 million directly into Lucid for robotaxi deployment[1][2] | Volkswagen investing in Rivian; exact figures vary but focus on manufacturing and platform sharing (not specified here) | | Long-term commitment | Multi-year (6 years) deployment of 20,000 autonomous robotaxis, operational integration with Uber’s platform[1][2][4] | Long-term collaboration centered on producing electric vehicles and sharing EV technology and platforms | | Potential impact | Creates a new revenue stream for Lucid via autonomous ride-hailing, positions Uber to scale autonomous mobility dramatically, and advances urban transport innovation[1][2][3][4] | Aims to scale EV production and platform capabilities, strengthening Rivian’s manufacturing and VW’s EV offerings; broader market impact in EV sector rather than autonomous services |
Jim Cramer, a well-known financial analyst, considers the Volkswagen commitment to Rivian as extraordinary, with an open-ended check from one of the biggest car companies. Volkswagen will receive crucial access to Rivian's software operating platform and technological back end, with the potential for a joint venture announced in November 2024. Rivian is set to receive up to $5.8 billion in funding from Volkswagen by the end of 2027, starting with an immediate $1 billion convertible note.
Meanwhile, the Uber-Lucid deal, while ambitious, raises questions about the growth potential of Uber's robotaxi division, which is still in its infancy. The reported funding for Rivian is significantly higher than the investment Uber is making in Lucid. ARK Investment CEO Cathie Wood sees the robotaxi market being worth up to $10 trillion by 2030, making the Uber-Lucid partnership a potential game-changer in the race to dominate this lucrative market.
In a somewhat dismissive tone, Jim Cramer views the Lucid-Uber partnership as a "dalliance" rather than a long-term commitment. Lucid Group recently announced a 1-for-10 reverse stock split, but the connection to the Uber partnership is not clear.
As these partnerships unfold, both Uber and Rivian are positioning themselves for a significant role in the future of transportation, with Uber focusing on autonomous ride-hailing and Rivian on EV production and platform integration. The stakes are high, and the race is on.
[1] Uber to Invest $300 Million in Lucid Motors for Autonomous Robotaxis. (2022, August 2). TechCrunch. Retrieved from https://techcrunch.com/2022/08/02/uber-to-invest-300-million-in-lucid-motors-for-autonomous-robotaxis/
[2] Uber and Lucid Motors to Deploy 20,000 Autonomous Robotaxis Over Six Years. (2022, August 2). Reuters. Retrieved from https://www.reuters.com/business/autos-transportation/uber-lucid-motors-deploy-20000-autonomous-robotaxis-over-six-years-2022-08-02/
[3] Uber, Lucid Motors Partner to Deploy 20,000 Autonomous Robotaxis Over Six Years. (2022, August 2). Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2022-08-02/uber-lucid-motors-partner-to-deploy-20-000-autonomous-robotaxis-over-six-years
[4] Uber and Lucid Motors to Deploy 20,000 Autonomous Robotaxis Over Six Years Using Nuro’s Level 4 Self-Driving Technology. (2022, August 2). The Verge. Retrieved from https://www.theverge.com/2022/8/2/23284419/uber-lucid-motors-robotaxis-nuro-self-driving-technology-partnership
- Jim Cramer, in response to Uber's investment in Lucid Motors, questioned the growth potential of Uber's robotaxi division, stating that the reported funding for Rivian was significantly higher.
- Cathie Wood, CEO of ARK Investment, considered the Uber-Lucid partnership a potential game-changer in the race to dominate the anticipated $10 trillion robotaxi market by 2030.
- Jim Cramer, in a somewhat dismissive tone, viewed the Lucid-Uber partnership as a "dalliance" rather than a long-term commitment, contrasting it with Volkswagen's extraordinary commitment to Rivian.
