Electric truck maker Rivian’s market value rises to $ 86 billion

SILVER SPRING, Maryland (AP) – Rivian Automotive shares jumped on their debut Wednesday, surging 53% as investors seek the next big winner in the electric vehicle market.

The closing price of $ 100.73 gave Rivian a market value of about $ 85.9 billion, higher than Ford and just below General Motors. This is remarkable because to date, Rivian has delivered about 150 of its electric pickups to customers, mainly its employees, while Ford and GM sell millions of vehicles worldwide every year.

Ford is one of the prominent sponsors of Rivian, who poured half a billion dollars into the company in 2019. Another is Amazon, which held 20% of Rivian before the IPO.

Rivian is committed to capitalizing on the growing consumer and investor interest in electric vehicles. He joins what is becoming a long line of companies, both new and old, trying to take market share from Tesla.

Tesla has largely dominated the electric vehicle market for years, amassing over $ 1 trillion in market value during that time. So far this year Tesla has sold about 627,300 vehicles.

Rivian valued the offering of its 153 million shares at $ 78, generating nearly $ 12 billion in revenue. The company said it will spend the money to ramp up production of its trucks, vans and SUVs.

Craig Irwin, an analyst with EVs and EV chargers at 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 good for the markets that there is another solid competitor to EVs on the market,” Roth said. “The Rivian IPO marks a maturing point for the industry and shows that billions of dollars are available to trusted players.”

Rivian has a contract with Amazon to build 100,000 electric vans at its former Mitsubishi plant in Normal, Illinois. Ford Motor Co. owns 13% of the shares and said the companies will work together to develop electric vehicles.

As of October 31, Rivian had approximately 55,400 pre-orders for vehicles in the US and Canada. These orders are placed with a $ 1,000 deposit, which is subject to cancellation and refund.

In September, Rivian unveiled its first vehicle, the R1T electric truck, and in December, the R1S electric SUV. Truck prices start at $ 67,500, while the base SUV package starts at $ 75,500 and gets even cooler with all the add-ons.

Car options include a $ 10,000 battery upgrade that will increase the range from 314 miles (505 kilometers) to over 400 miles (643 kilometers). The three-person rooftop tent adds $ 2,650 to the bill, and the off-road recovery kit will cost an additional $ 600.

The company said it plans to produce about 1,200 R1Ts and 25 R1Ss and deliver about 1,000 R1Ts and 15 R1Ss by the end of 2021.

The R1T will compete with Ford’s F-150 Lightning electric pickup truck, which goes on sale next year. Lightning has a starting price of $ 40,000 but will sell for thousands of dollars more as customers add additional options. General Motors has announced plans to produce an electric version of the Silverado pickup.

“While the R1T has the advantage of being the first to enter the market and is likely to appeal to buyers like Tesla, long-term sales expectations for a mid-size truck over $ 70,000 are not very high,” said Jessica Caldwell of automotive website Edmunds. … in an email.

In 2020, electric vehicles accounted for just over 3% of the global auto market and less than 2% of the US auto market, according to research firm LMC Automotive. The group predicts that by 2025 these numbers will rise to about 15% and 12%, respectively.

Founded in 2009, Rivian said it lost $ 426 million in 2019 and $ 1 billion last year. He said that in the first six months of this year, he lost almost another billion dollars. Tesla, which went public in 2010, posted its first annual profit last year.

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