Tesla has been a fantastic investment over the past decade, with sales climbing nearly 2,900% and its stock price increasing around 1,400%. This has significantly benefited early investors.

However, the electric vehicle (EV) market is still growing, making it a good time to look for new opportunities. If you’re on the lookout for the next Tesla, consider Rivian Automotive (RIVN -0.79%). Here’s why.

Risk Can Lead to Reward

Investing usually involves a trade-off between risk and reward. You can’t guarantee a higher return just by taking more risks, so it’s key to make informed choices. Right now, Rivian Automotive offers good prospects for investors.

About ten years ago, Tesla was in a similar position with sales of around $5 billion and just two high-end models. Many investors were skeptical about Tesla’s potential, which kept its stock prices low. By 2020, Tesla was close to bankruptcy, but then sales of its mass-market vehicles surged, tripling revenue from $30 billion to over $90 billion.

Would you have invested in Tesla then? Most would have avoided it without knowing the future. But this was a prime opportunity, as Tesla’s revenue exploded after launching its lower-priced vehicles, leading to over 1,000% gain in stock value in five years.

Currently, Rivian is launching new affordable models: the R2, R3, and R3X. These are expected to cost under $50,000, similar to Tesla’s more accessible offerings. However, these models won’t be available until 2026 at the earliest, creating skepticism among investors. Rivian’s stock is trading under 2 times sales, significantly cheaper than Tesla’s valuation.

If you are open to the risks and can wait, there may be rewarding opportunities ahead.

Investing Strategy for Rivian Stock

Rivian’s stock is likely to be volatile until its new vehicles launch. A good strategy is dollar-cost averaging, which involves investing a set amount monthly to benefit from price dips. For instance, instead of investing $1,000 all at once, you could invest $100 monthly.

Patience is crucial with Rivian. The market needs to see tangible results before valuing the stock higher. This hesitancy may provide a good opportunity to buy, so staying calm during price swings is essential.