With high-profile backers, EV startup Rivian goes public
With high-profile backers, EV startup Rivian goes public
SILVER SPRING (AP) — Shares in Rivian Automotive are set to trade publicly Wednesday, and the world should get a better idea of just how hot investors are for the electric vehicle market.
Rivian, the EV startup backed by Amazon and Ford, raised at least $10.5 billion in its public offering to help it ramp up production of its trucks, vans and SUVs. It s the latest in what is becoming a long line of companies trying to carve out some of Tesla’s dominant market share.
The offering of 135 million shares was priced at $78 per share, giving Rivian a market value of $77 billion on a fully diluted basis. That compares with Honda’s $53 billion and Ford’s $80 billion.
Automakers big and small, new and old, are chasing Tesla, which has largely dominated the electric vehicle market for years, amassing a market value of more than $1 trillion along the way. So far this year, Tesla has sold around 627,300 vehicles.
Craig Irwin, an analyst who covers electric vehicle and EV charging companies for Roth Capital, says that even with more companies entering the EV market, there is still plenty of room for newcomers.
“EVs are inevitable, and it’s a good thing for the markets to have another credible EV competitor come public,” Roth said. “Rivian’s IPO marks a point of incremental maturation for the industry and shows that billions in capital is available for credible players.”
Rivian has a contract with Amazon to build 100,000 electric delivery vans at its factory, a former Mitsubishi plant in Normal, Illinois. Amazon.com Inc. owns about 20% of Rivian before accounting for the public offering.
Ford Motor Co. invested a half-billion dollars into Rivian in 2019 and said the companies would work jointly to develop electric vehicles. The Detroit automaker has about a 13% stake in Rivian leading up to the public offering.
As of Oct. 31, Rivian had about 55,400 vehicle preorders in the U.S. and Canada. Those orders are placed with a $1,000 deposit that can be canceled and refunded.
Rivian rolled out its first vehicle, the R1T electric truck in September and will launch its electric SUV, the R1S, in December. Prices for the truck start at $63,000, while the SUV base package starts at $74,000 and approaches six figures with all the add-ons.
Options for the vehicles include a $10,000 battery upgrade that will extend the driving range from 314 miles (505 kilometers) to more than 400 miles (643 kilometers). A three-person roof-mounted tent adds $2,650 to the bill and an off-road recovery kit will cost an additional $600.
The research firm LMC Automotive says in 2020, EVs made up a little more than 3% of the global auto market and less than 2% of the U.S. auto market. The group projects those numbers to shoot up to about 15% and 12%, respectively, by 2025.
Rivian, which was founded in 2009, says it lost $426 million in 2019 and $1 billion last year. Tesla, which went public in 2010, recorded its first annual profit last year.
