Monday, January 30, 2023

With high-profile backers, EV startup Rivian goes public

SILVER SPRING, MD (AP) — Shares in Rivian Automotive are set to go publicly for trade Wednesday, and the world should have a better idea of ​​just how hot investors are for the electric vehicle market.

Rivian, an 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 a long line of companies trying to carve out some of Tesla’s dominant market share.

According to The Wall Street Journal, the offering price of 135 million shares was $78 per share, giving Rivian a market value of $77 billion on a fully diluted basis. This is compared to Honda’s $53 billion and Ford’s $80 billion.

Automakers big and small, new and old, are chasing Tesla, which has dominated the massive electric vehicle market for years, amassing a market value of more than $1 trillion along the way. So far this year, Tesla has sold about 627,300 vehicles.

Craig Irwin, an analyst covering electric vehicle and EV charging companies for Roth Capital, says that even with more companies entering the EV market, there’s still plenty of room for newcomers.

“EVs are inevitable, and it’s a good thing for markets to have a more reliable EV competitor going public,” Roth said. “Rivian’s IPO marks a point of incremental maturity for the industry, and demonstrates that there are billions of capital available to trusted players.”

Rivian has signed a contract with Amazon to manufacture 100,000 electric delivery vans at its factory, a former Mitsubishi plant in Normal, Illinois. Inc. Rivian owns about 20% before accounting for the public offering.

Ford Motor Company to invest half a billion dollars in Rivian in 2019 And said the companies would work jointly to develop electric vehicles. The Detroit automaker has a roughly 13% stake in Rivian leading up to the public offering.

As of October 31, Rivian had approximately 55,400 vehicle pre-orders in the US and Canada. Those orders are placed with a $1,000 deposit that can be canceled and refunded.

Rivian launched its first vehicle, the R1T electric truck, in September and will launch its electric SUV, the R1S, in December. Prices start at $63,000 for the truck, while the SUV base package starts at $74,000 and goes up to six figures with all add-ons.

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

Research firm LMC Automotive says that in 2020, EVs accounted for slightly more than 3% of the global auto market and less than 2% of the US auto market. The group anticipates increasing those numbers to 15% and 12%, respectively, by 2025.

Rivian, founded in 2009, says it lost $426 million in 2019 and $1 billion last year. Tesla, which went public in 2010, reported its first annual profit last year.


Nation World News Desk
Nation World News Desk
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