Rivian, a maker of electric trucks and vans, is about to go public with a stock price valuing the company at nearly $70 billion, a number that notably highlights Wall Street’s belief that the electric vehicle market is growing. Rapid development is still open. field.
In a stock filing on Tuesday, Rivian said it is selling its shares in an offering for $78. With that total, it will raise nearly $12 billion. That fundraising number will surpass Uber, which raised $8 billion from its IPO in 2019.
Rivian stock will begin trading Wednesday on the Nasdaq exchange under the ticker RIVN. At nearly $70 billion, Rivian’s market capitalization would be close to that of Ford Motor, which is valued at $80 billion and sold more than 4 million vehicles worldwide last year.
The market environment for the offering was shaken this week as shares of Tesla, the leading electric car maker, plunged after its chief executive, Elon Musk, said he would likely sell some of its shares.
Rivian desperately wanted cash. Prior to this IPO, it had raised more than $10 billion from investors including Amazon and Ford, and it is expected to spend billions of dollars trying to ramp up production of three of its vehicles. himself: a premium pickup aimed at off-road drivers; a sport utility vehicle; and a delivery van developed with Amazon, which has a substantial stake in Rivian and has ordered 100,000 trucks.
Rivian and many other automakers are betting that consumers are ready for a quick shift to electric vehicles in the next decade. General Motors has said it aims to phase out production of gasoline-powered vehicles by 2035. Tesla, which is on track to sell nearly a million electric vehicles worldwide this year, has a market capitalization value. $1 trillion, exceeding the total value of GM, Ford. , Toyota Motor, Volkswagen, BMW and some other car manufacturers.
Now, much depends on whether Rivian can scale up production to meet customer orders. Tesla has had a rough few months as it struggles to mass produce its sedan.
At the end of last month, Rivian delivered just 156 of its pickup trucks, called the R1T; It plans to start delivering the SUV, the R1S, next month. It said in a financial filing that it does not expect to complete 55,400 orders for trucks and SUVs until the end of 2023, stressing that it will take time to bring the production line to a worthwhile number of vehicles. tell.
Like other electric vehicle makers that have gone public this year, Rivian is reporting massive losses. In the first six months of this year, the company posted a net loss of $994 million, almost as much as the whole of 2020, when it lost $1.02 billion. Investors may be willing to endure losses for a while. The van contract with Amazon should in theory guarantee a steady stream of revenue.
And Rivian could also benefit from the view in the auto sector that it’s doing well. Its CEO, RJ Scaringe, has a doctorate in mechanical engineering from the Massachusetts Institute of Technology and has so far not shown himself to be easily distracted or a source of controversy, only inappropriate quote about Mr. Musk of Tesla.
Rivian pickups and SUVs are focused on well-off buyers who enjoy the outdoors. “Keep the world adventurous forever,” declared Rivian’s IPO prospectus.
However, Rivian will face tough competition, including automakers with a long history and a lot of experience in mass production. Next year, Ford is expected to begin production of an electric version of the F-150 pickup truck, the top-selling model in the United States. GM is expected to start selling the all-electric GMC Hummer soon – in both truck and SUV versions – and is working on the Chevrolet Silverado electric pickup truck.
At the IPO price, Rivian would be valued even higher, at around $75 billion, if its bankers sold more shares they had to meet strong demand and some shares were issued to Employee compensation is included in the calculation.