Rivian’s Value Soars As It Makes Its Public Debut
Rivian Now Sports a Market Cap of $77 Billion
Rivian Automotive (RIVN), the electric vehicle startup which counts Amazon (AMZN) and Ford (F) as backers, raised $11.9 billion in what is amounting to the biggest IPO on an exchange in the US since 2014.
Investors piled into Rivian on its first day as a public company, hoping to capitalize as the electric vehicle market takes off. Tesla (TSLA), a pioneer in the EV market, has seen its share price soar over the last year. Many investors are betting that Rivian will see similar success.
Rivian IPO Proceeds Will Be Used to Scale
Proceeds from Rivian’s IPO will be used to boost production of its EVs and for the development of new vehicles. The company will also use the cash to construct a new manufacturing plant and to get its hands on more batteries, which are crucial for EVs and are in short supply.
In September Rivian began delivering the R1T, its electric pickup. By the end of 2021 the company plans to roll out more EVs including an SUV dubbed R1S and a delivery truck. The latter is being developed in conjunction with Amazon, which owns about 19% of Rivian. Ford, which has a 12% stake in Rivian, saw its $1.2 billion investment surge to a value of $9 billion thanks to the IPO.
Rivian Joins Other EV IPOs
Rivian joins a growing list of EV makers which are going after the luxury side of the market, including Lucid (LCID), XPeng (XPEV), and Li Auto (LI). All have gone public since the summer, commanding huge valuations despite a lack of profits. Since the start of last year through June, Rivian has seen losses of $2 billion even as it gears up to deliver roughly 1,000 vehicles by the end of this year.
Rivian is garnering a lot of positive attention following its successful IPO., but the company does face challenges. Competition is fierce, supplies are hard to come by, and its ambitious plan to churn out three models this year could prove challenging. It will be interesting to see if investor enthusiasm stays high in Rivian’s early days as a public company.
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