Many promising electric vehicle (EV) stocks have had a tough time in recent years. Tesla‘s (TSLA +3.93%) auto sales have declined for several years straight. Rivian‘s (RIVN +0.28%) sales growth has also flatlined. Lucid Group (LCID +4.79%), meanwhile, continues to post mounting losses.

Here’s the thing: All three of these companies are chasing a $10 trillion opportunity that could cause their stock prices to soar in the coming years. But only two of these three companies are properly positioned to take advantage and create enormous value for shareholders.

Rivian Automotive

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Robotaxis could be a $10 trillion global opportunity

The robotaxi market is just getting started. Some estimates place the current market size at between $1 billion to $2 billion globally. But huge growth is anticipated, thanks to sizable improvements in self-driving capabilities due to rapidly advancing artificial intelligence (AI) technologies. “Artificial intelligence is reshaping the car and becoming a key differentiator,” concludes a recent report from global consulting firm McKinsey & Co.

Attaining full autonomy would let a carmaker not only tap the nascent robotaxi market, which some experts believe will ultimately be valued at as much as $10 trillion, but also sell more units to consumers. “Premium buyers are increasingly willing to switch brands for better digital features,” McKinsey’s report added.

Advancing self-driving technology should be a top priority for EV makers. Autonomy is a requirement for targeting the robotaxi market. It’s also a requirement for selling vehicles to future consumers. EV makers are uniquely positioned to take advantage of these market opportunities. EVs usually are more tech-heavy than conventional cars, and EV makers are often more innovation-focused than their traditional peers with legacy manufacturing approaches.

In an interview late last year, Rivian Chief Executive Officer RJ Scaringe highlighted how seriously EV companies are taking autonomy, and investing heavily to build their own systems rather than relying on suppliers. He stressed:

We made the decision years and years ago to build our entire vertical software platform in-house and not rely on tier-one suppliers. We then built teams of thousands of people to go put all that together. [We] spent many, many, many hundreds of millions of dollars to develop those systems. And when we’ve approached autonomy and our overall AI roadmap, we had a very similar view, which is this is going to be the most important technical shift in transportation, I would say, more than anything else, more than anything since the beginning of the car. And we wanted to control our own destiny. 

Tesla and Lucid have taken similar approaches, investing heavily in their own AI and autonomy capabilities. If I wanted to invest in an autonomous future that can best target opportunities like the growing robotaxi market, I’d stick with EV stocks like Lucid, Tesla, and Rivian. But which stocks are most attractive today? Two in particular stick out.

Will Tesla, Lucid, or Rivian dominate robotaxis?

Tesla’s $1.3 trillion market cap perhaps creates less upside potential versus Rivian and Lucid, which both have market caps well under $20 billion. But there’s no doubt that Tesla is best positioned to dominate a self-driving future. The company has unparalleled access to capital, and a multi-billion-dollar stake in xAI, Elon Musk‘s AI start-up that is now owned by SpaceX.

With robotaxi pilot programs now active in several metro areas, Tesla is the go-to pick for betting on an autonomous driving future. But I’m also a fan of Rivian. The company recently launched its R2 SUV, prompting Uber Technologies to place an order for 50,000 units to power its robotaxi arm. This investment is a massive proof point for Rivian’s technology, and I expect more robotaxi businesses will place orders with Rivian in the future.

Lucid is the odd one out in this picture. The company’s relatively tiny size limits its ability to invest aggressively, and a lack of affordable models limits other robotaxi businesses from placing big orders. Perhaps the company’s $2 billion market cap creates more upside potential, but Rivian’s $18 billion valuation still offers plenty of growth upside with significantly less execution risk.