Rivian Just Did What Investors Despised Lucid for. How Bad Is It?
Rivian just announced a capital raise that would result in shareholder dilution. The important question for investors: Is this justified?
Overview
When investors are considering young electric vehicle (EV) stocks, Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) often pop up. Both Rivian and Lucid have proved capable of developing compelling vehicles, albeit at lofty prices initially, and they have advanced EV technology and software.
More recently, Rivian achieved its first full-year gross profit in 2025, while Lucid has struggled to improve its unit economics, further separating the two in favor of Rivian. That said, Rivian just did something that Lucid investors groan about: raising capital and diluting shareholders. Does this change how investors should view the two?
Details
A little Investing 101: Shareholder dilution is simply the decrease in a shareholder's existing ownership percentage due to a company issuing new shares of stock for raising capital and employee compensation, among other factors. You can argue that investors are OK with some dilution because in theory, the company now has more capital to pursue growth, which in turn improves its investment potential.
Source
Originally published at www.fool.com.