Rivian, a maker of electric trucks and vans, is going public at a stock price that values the company at nearly $70 billion, a notable number that highlights Wall Street’s belief that the burgeoning electric vehicle market is still an open field.
In a securities filing on Tuesday, Rivian said it was selling its shares in the offering for $78. At that amount, it will raise nearly $12 billion. That fundraising figure would surpass Uber, which raised $8 billion in its IPO in 2019.
Rivian’s shares will trade Wednesday on the Nasdaq exchange under the ticker RIVN. At nearly $70 billion, Rivian’s market cap would approach that of Ford Motor, which is valued at $80 billion and sold more than four million vehicles worldwide last year.
The market environment for the offering has been shaken this week as shares of Tesla, the leading electric car maker, collapsed after its CEO, Elon Musk, said he could sell some of its shares.
Rivian has a huge appetite for money. Before its IPO, it raised more than $10 billion from investors, including Amazon and Ford, and expects to spend billions of dollars as it tries to ramp up production of its three vehicles: a luxury pickup truck aimed at drivers who drive off-road. -keep road driving; an SUV; and a van developed with Amazon, which has a significant stake in Rivian and has ordered 100,000 of the vans.
Rivian and many other automakers are betting that consumers are willing to quickly switch to electric vehicles in the next decade. General Motors has said it aims to phase out the production of gasoline-powered vehicles by 2035. Tesla, on track to sell nearly a million electric vehicles worldwide this year, has a market cap of $1 trillion, which is more than the combined value of GM, Ford, Toyota Motor, Volkswagen, BMW and several other automakers.
Much now depends on whether Rivian can scale its production to meet customer orders. Tesla went through many difficult months as it struggled to produce its sedan in large numbers.
By the end of last month, Rivian had delivered just 156 of its pickups, known as the R1T; it plans to start shipping the SUV, the R1S, next month. It said in a financial filing that it did not expect to fulfill 55,400 orders for the truck and SUV by the end of 2023, underlining that it would take time for production lines to produce a significant number of vehicles.
Like other electric vehicle manufacturers that went public this year, Rivian is reporting heavy losses. In the first six months of this year, it had a net loss of $994 million, almost the same as in all of 2020, when it lost $1.02 billion. Investors may be willing to tolerate the losses for some time. The van contract with Amazon should, in theory, ensure a steady stream of revenue.
And Rivian can also benefit from the auto sector’s view that it is well run. Its chief executive, RJ Scaringe, has a PhD in mechanical engineering from the Massachusetts Institute of Technology and so far has not shown himself to be easily distracted or the source of unnecessary controversy, criticizing Tesla’s Mr. Musk.
Rivian’s pickup and SUV are aimed at wealthy buyers who love the great outdoors. “Keep the world adventurous forever,” says Rivian’s IPO prospectus.
Still, Rivian will face huge competition, including established automakers with significant experience in mass production. Next year, Ford would begin production of an electric version of its F-150 pickup, the best-selling vehicle in the United States. GM is expected to begin selling an electric GMC Hummer soon — in both truck and SUV versions — and is working on a Chevrolet Silverado electric pickup.
At the IPO price, Rivian will be valued even higher, at about $75 billion, if its bankers sell additional stock they have on hand to meet strong demand and some stock issued as compensation to employees in the calculation. be included.