Rivian, a promising and well-funded electric truck manufacturer, said Friday it planned to sell shares through an IPO, but gave few additional details.
The company, which has raised more than $10 billion from investors including Amazon and Ford Motor, is building an electric pickup and SUV at a former Mitsubishi plant in Illinois. Its founder, RJ Scaringe, told customers last month that he expected the truck to ship in September and the SUV to follow shortly after. The company also develops vans for Amazon.
Automotive analysts consider Rivian one of the most viable electric vehicle start-ups in what is expected to be a highly competitive market. In addition to Tesla, the dominant electric car maker, major automakers such as General Motors, Volkswagen and Ford are planning to introduce dozens of new electric cars and trucks in the coming years.
“It’s an EV juggernaut, it’s got the pedigree with Amazon, Ford, and a who’s who of backers,” said Dan Ives, director of equity research at Wedbush Securities. “Investors have been waiting for the day when a Rivian would go public.”
If the company’s electric pickup hits the market in September, it would beat GM’s GMC Hummer electric pickup expected by the end of the year and Ford’s F-150 Lightning electric pickup. The gas-powered F-150 has long been America’s best-selling vehicle, and the electric version could become an immediate force in the electric vehicle market upon its debut, most likely in the spring.
Rivian also plans to expand a network of charging stations and service centers. mr. Scaringe, an engineer with a Ph.D. from the Massachusetts Institute of Technology, said in the July email to customers.
The company may be entering a busy field, but it takes a different approach to that of Tesla, the pioneer most people think of when they think of electric cars. Tesla has had great success selling sporty sedans, but it has yet to focus heavily on pickup trucks and off-road vehicles — lucrative segments of the auto industry. Rivian has focused on producing “adventure” vehicles that it claims are made for trails and dirt roads.
The transition to electric cars
“Rivian is one of the best positioned electric vehicle start-ups,” said Asad Hussain, senior mobility analyst for PitchBook, by email. “The company’s focus on the relatively untapped market for premium electric trucks should allow it to enter the market quickly.”
The leaders of Rivian and Tesla are also very different. Tesla CEO Elon Musk was a brash and combative force in the auto industry, making big promises and engaging in public feuds with individuals and government agencies. Mr. Scaringe, on the other hand, is restrained and measured in his public statements and promises.
Still, both executives are immersed in the details of their business. Mr. Musk has said he slept at his company’s main factory in Fremont, California, at key times when Tesla ramped up production. Mr. Scaringe is also a regular at Rivian’s factory in Normal, Illinois, and employees there refer to the color of robots and safety lines directing the flow of people as “RJ Blue.” It is known to influence vehicle colors, including one known as “launch green.”
Earlier this year, a California state judge allowed Tesla to file a lawsuit alleging that Rivian stole intellectual property by taking away former employees. Rivian has said the lawsuit is futile and intended to hurt a fast-growing competitor.
Although Rivian has been around in one form or another since 2009, for much of the past decade it has regularly faced skepticism about a product that seemed aloof and speculative, said Mr. Scaringe in an interview in June.
“In the very beginning, on Day 1, Year 1, the risk of starting a business like this was huge and the probability of success was very low,” he said. “That’s just true. And I had to accept that.”
But Mr Scaringe said he remained confident in his team and in the strategic plan they had put in place: first raise enough money to develop core technologies – software, battery architecture, mechanical systems – that could support vehicles for both consumers and commercial customers. ; attract more capital to mass-produce trucks and vans.
Rivian seemed to be entering that second phase a few years ago. In the fall of 2018, Amazon founder Jeff Bezos flew to Michigan to meet Mr. Scaringe and see the company’s vehicles. By the end of the following year, Rivian had raised nearly $3 billion from investors, including Ford and Amazon, who also ordered 100,000 vans.
“We knew we needed to build some strategic partners that would allow us to scale to different segments and, most importantly, conquer this fleet side,” said Mr. Scaringe. “Amazon saw great merit in the way we approached both building the business and the opportunity for us to work together.”
When Mr. Bezos flew into space last month aboard a rocket built by his Blue Origin company, he and the rest of his crew hitchhiked in a Rivian vehicle to the launch pad.
Rivian’s other major backers include BlackRock, Fidelity, and T. Rowe Price.
The company’s decision to pursue an IPO is noteworthy for another reason. According to a research firm Dealogic, more than two dozen companies that produce electric vehicles, batteries and chargers have gone public or are planning to merge with special acquisition companies or SPACs.
Deals with SPACs are considered quick access to public markets, while an IPO is a more rigorous process that usually takes longer and involves more scrutiny. In recent months, some investors and regulators have questioned the optimistic statements of the makers of SPACs and the companies that have acquired them, including a handful of electric car companies.
By filing the confidential paperwork for an IPO with the Securities and Exchange Commission, Rivian and his existing investors retain much more control and ownership of their company than they would with a SPAC deal. The sponsors of those acquisition companies generally take a large chunk of a company’s ownership as compensation for getting it listed quickly.