As electric vehicle makers Rivian (RIVN) and Lucid (LCID) see their stocks decline on lackluster earnings and production outlooks amid slowing EV demand, which mainline automaker is best positioned to capture the attention of prospective EV buyers?

Tom Narayan, RBC Capital Markets Lead Equity Analyst — Global Autos, joins Yahoo Finance Live to highlight why he believes Stellantis (STLA) — which owns Jeep, Dodge, and Chrysler — stands to gain the most from plug-in hybrid models while price pressures barrage consumer interest in EVs.

"Those names that have more dedicated architectures that can only make full electrics now are facing some problems, right, because all they can do is make bets. So if the demand for those slow, it's not like they can switch and pivot and make plug-in hybrids," Narayan explains. "That's probably one of the main reasons why we like a name like Stellantis. it looked like a mistake to a lot of people a few years ago, when they chose this approach. But, now they're looking like the smartest kids in the classroom."

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Narayan also comments on Stellantis' pricing strategy geared toward American auto buyers.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

AKIKO FUJITA: Yeah, the differentiation there between slowing growth rate and declining sales certainly an important one.

You talk about this push towards more plug-in hybrids. At least that's what consumers are looking at. Does it ultimately come down, then, to a more diversified portfolio slash lineup? Is that why you like Stellantis?

TOM NARAYAN: Yes, exactly. So I would say Stellantis, Toyota notably, and, to a lesser extent, BMW are the carmakers that, early on, they chose to do a flexible architecture approach. What does that mean? On the same line that they make full electrics, they can also make ICEs and plug-in hybrids. So if there's more demand for ICEs and plug-in hybrids, they can just change and make more of those.

So that's really why it's benefited a name like a Stellantis, like a Toyota, like a BMW, and why we favor those. Those names that have more dedicated architectures that can only make full electrics now are facing some problems, right, because all they can do is make BEVs. So if the demand for those slow, it's not like they can switch and pivot and make plug-in hybrids.

So yeah, that's probably one of the main reasons why we like a name like Stellantis. It looked like a mistake maybe to a lot of people a few years ago when they chose this approach, but now they're looking like the smartest kids in the classroom.