Rivian Targets IPO Before Year's End
Rivian Automotive is seeking to go public in the fall and targeting a valuation of at least $50 billion, according to the latest reports. The all-electric startup company, supported by Amazon and the Ford Motor Company, has already amassed around $8 million from investors and was valued at $27.6 billion less than a month ago.
While we couldn’t possibly say what it’s actually worth, burgeoning EV manufacturers have performed incredibly well on the stock market lately. Rivian would almost assuredly see its valuation balloon to the targeted sum through an initial public offering. It already has a product line, 3,600 employees spread between the Midwest and California, some serious marketing under its belt, and a relatively strong relationship with a few of the world’s largest companies. We’ve seen more done with far less on Wall Street.
It also has the right kind of people interested in it — at least that’s how most big investors should feel. Bloomberg noted that Rivian’s last big round of investments included raising $2.65 billion from a team headed by the T. Rowe Price Group.
From Bloomberg:
Rivian also has a deal with Amazon to build 100,000 custom electric delivery vans by 2030. In the near-term, the companies say 10,000 of the vans will be on the road making deliveries by 2022. Rivian will build three different models of the van, which is capable of going about 150 miles on a single charge.
Production and U.S. deliveries of its debut consumer EV, the R1T pickup, are due to start in June. The company will then start delivering its R1S SUV in August. The company has retrofitted a former Mitsubishi Motors plant in Normal, Ill., where it also plans to build the EV delivery van for Amazon.
Rivian is well on its way to becoming a real automaker, which bodes well. Other EV manufacturers have performed incredibly strong just by making big promises ahead of a listing. For example, Nikola managed to see its valuation surge to ludicrous levels (over $30 billion) last year before being shorted by Hindenburg Research after it pointed out what were essentially fraudulent claims made by the company.Granted, the EV startup didn’t have a traditional IPO and instead used a special-purpose-acquisition company called VectorIQ to guarantee a higher valuation. But it was destined for true investment greatness the moment every financial advisement outlet started talking about pumping it up and then dumping. Nikola is currently making headlines over a potential breakthrough in hydrogen, with plenty of discussion on what this means for investors. Expect a similar existence for Rivian (hopefully minus the fibbing) until it can prove itself as a profitable automaker and backers lose all interest.[Images: Rivian]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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The ultimate test of any EV is how much the batteries will cost, how long they last, the cost of replacement batteries, and the difficulty of disposing/recycling the spent batteries. As a resident of California, I'd add the availability of electricity to recharge the batteries, and the cost per kWh, but that's a whole different discussion.
The Amazon project should give them a nice program to build reliability while monitoring a relatively limited number of fleet locations.