Rivian Automotive made its Wall Street debut, and despite being a new company, investors have put it in the same league as the auto industry’s most well-known brands.
Rivian’s stock jumped 29% in the first week of trading after its initial public offering (IPO), valuing the company at $86 billion, equal to G.M. and higher than Ford’s. However, it is still a small fraction of the value of EV pioneer Tesla, which has a market capitalization of over $1 trillion.
The company trading under the symbol “RIVN” on the Nasdaq has sparked the interest of investors looking to profit from the fast-growing electric vehicle market. However, the company has yet to develop a viable business model and expects to generate more than $1 million in revenue in the third quarter.
Amazon and Ford are Rivian’s investors, each owning a 20% and a 12% stake in the company, now valued at $17 billion and $10 billion, respectively. Amazon valued its $3.8 billion investment in the electric vehicle manufacturer a few months ago. As a result, its Rivian stake is now worth nearly five times as much as it was two months ago.
Amazon announced earlier this year that it would buy 100,000 delivery vans from Rivian as part of its “Climate Pledge.” In some parts of the United States, Amazon’s new delivery vans are already in use.
Rivian’s relationship with Ford has been described as a strategic investment. The company’s Lincoln division had planned to produce electric vehicles with the newcomer in the past. However, due to the global pandemic, those plans were postponed.
Rivian has been in defense mode since 2009, and it released its pickup truck and SUV in November 2018. Initially, the company planned to build a Tesla Roadster competitor, but it later shifted its focus to SUVs and pickup trucks. Rivian’s first vehicle, the R1T electric truck, was released in September, and the R1S electric SUV will be released in late December. The truck starts at $67,500, while the SUV base package starts at $75,500.
The company stated that it would produce 1,200 R1Ts and 25 R1Ss and deliver approximately 1,000 R1Ts and 15 R1Ss by the end of 2021.T
The company, however, is still in its infancy and has yet to generate significant revenue. Furthermore, it hasn’t produced a large number of electric vehicles. Given the global chip shortage and port restrictions that have crippled automakers this year, it’s unclear how rapidly Rivian will increase its production. Nevertheless, the company might benefit from new US legislation that will provide $7.5 billion federal grants to EV manufacturers for building a national network of electric vehicle charging stations.
Rivian vehicles, according to Scaringe, are ideal for people who enjoy outdoor pursuits and have a desire to explore since the company is installing its charging stations in out-of-the-way areas, including national parks.