Shares in Rivian Automotive are set to trade publicly on Nov. 10, and the world should get a better idea of just how excited investors are about the electric vehicle market.
Ahead of the start of trading, Rivian shares priced at $78, which gives the company an estimated market value of $66.5 billion. It’s a noteworthy figure, given that Rivian has so far delivered about 150 of its electric pickup trucks to customers, mostly employees, and lost $1 billion in the first six months of this year. The valuation is up there with established automakers such as Honda ($53 billion) and Ford ($80 billion), which sell millions of cars worldwide each year.
Rivian has some high-profile corporate backers: Ford held a 13% stake in Rivian coming into the offering and Amazon had a 20% stake.
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 could raise as much as $12 billion with the sale of 153 million shares, which would top the $8 billion Uber raised in its IPO in 2019. Rivian said it will use the money to ramp up production of its trucks, vans and SUVs. It’s the latest in what’s becoming a long line of companies trying to carve out some of Tesla’s dominant market share.
Rivian has a contract with Amazon to build 100,000 electric delivery vans at its factory, a former Mitsubishi plant in Normal, Illinois. Ford Motor Co. invested a half-billion dollars into Rivian in 2019 and said the companies would work jointly to develop electric vehicles.
The company said it aims to produce about 1,200 R1Ts and 25 R1Ss and deliver around 1,000 R1Ts and 15 R1Ss by the end of 2021.
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