Rivian Automotive’s stock soared 53 percent in its initial public offering on Wednesday, as investors hunted for the next big winner in the electric vehicle sector.
Rivian’s market worth was $85.9 billion at the closing price of $100.73, somewhat higher than Ford’s and slightly lower than GM’s. Rivian has only sold roughly 150 of its electric pickup trucks to clients so far, most of whom are employees, whereas Ford and GM sell millions of automobiles each year.
Rivian’s high-profile backers include Ford, who invested a half-billion dollars in the company in 2019. The other is Amazon, which had a 20% interest in Rivian before its initial public offering.
Rivian hopes to capitalize on the growing demand for electric vehicles among customers and investors. It’s the latest in a long line of new and old competitors attempting to steal market share from Tesla.
For years, Tesla has mainly controlled the electric vehicle market, collecting a market capitalization of more than $1 trillion in the process. Tesla has sold roughly 627,300 units so far this year.
Rivian priced the 153 million shares at $78, netting over $12 billion in revenues. The funds will be used to increase the production of the company’s trucks, vans, and SUVs, according to the corporation.
Even with more companies entering the EV market, according to Craig Irwin, an analyst at Roth Capital who covers electric vehicles and EV charging providers, there is still plenty of potential for newcomers.
“EVs are unavoidable, and having another serious EV rival come public is a positive thing for the markets,” Roth said. “Rivian’s IPO is a step forward in the industry’s growth and demonstrates that billions of dollars are accessible for competent participants.”
Rivian has a contract with Amazon to construct 100,000 electric delivery vehicles at its factory in Normal, Illinois, which was once a Mitsubishi plant. Ford Motor Company owns a 13% investment in the company and has stated that the two businesses would collaborate on electric car development.
Rivian had roughly 55,400 vehicle preorders in the United States and Canada as of October 31. Those orders need a $1,000 deposit, which can be canceled and returned if necessary.
Rivian released its first car, the R1T electric truck, in September and plans to release the R1S electric SUV in December. The truck starts at $67,500, while the SUV’s base package starts at $75,500 and climbs considerably higher with all of the optional features.
A $10,000 battery upgrade for the vehicles will increase the driving range from 314 miles (505 kilometers) to more than 400 miles (643 kilometers). A three-person roof-mounted tent will set you back $2,650, while an off-road recovery gear would set you back $600.
By the end of 2021, the business plans to produce 1,200 R1Ts and 25 R1Ss and deliver 1,000 R1Ts and 15 R1Ss, according to the company.
The R1T will compete with Ford’s electric truck, the F-150 Lightning, which will be available next year. The Lightning has a starting price of $40,000, but as customers add upgrades, it will sell for thousands more. The Silverado pickup will be available in an electric form, according to General Motors.
“Although the R1advantage T’s is that it’s first to market and will likely appeal to a Tesla-type customer,” Said Jessica Caldwell of Edmunds in an email, “the long-term sales estimates for a $70,000+ midsize truck aren’t particularly high.”
According to LMC Automotive, EVs will make up a little more than 3% of the worldwide auto market in 2020, and less than 2% of the US auto market. By 2025, the group predicts that those percentages will have risen to around 15% and 12%, respectively.
Rivian, which was created in 2009, claims to have lost $426 million this year and $1 billion the previous year. In the first half of this year, it posted a loss of roughly a billion dollars. Last year, Tesla, which went public in 2010, made its first annual profit.
