Rivian celebrates furious stock market launch: The new Tesla?

Are you annoyed that you didn’t buy Tesla shares early on? Then you can now breathe a sigh of relief. There’s a new big player in the e-car ring, and it goes by the catchy name of Rivian. Now the company, which has become known for e-SUVs and pickups, has gone public with great success.

Initial public offering raises $12 billion

Things could hardly be better for Rivian. The production lines have only just started rolling and the company is already getting a lot of interest from investors. This is made clear by the extremely successful stock market launch of the young e-car manufacturer. The company, which some are already calling Tesla 2.0, is said to be worth a whopping 75.4 billion US dollars. According to the manufacturer’s own statements last week, the company was still expecting to be worth 60 billion US dollars. In total, “Rivian Automotive” was able to place 153 million share certificates at its IPO on Wednesday. The manufacturer of the R1T, which is anything but inconspicuous, paid 78 US dollars for each of them. In total, the company generated sales of the equivalent of 10.3 billion euros. There has not (yet) been a larger IPO in 2021.

If you’re not particularly familiar with the stock market values of automakers, take a comparative look at the competition. While Rivian Automotive’s value is still overshadowed by e-car mogul Tesla, the young company has already left market giants like BMW behind. After all, the traditional Bavarian company was recently able to boast a much lower stock market value of “only” $68.3 billion. In view of the fact that Rivian is just at the beginning of what could be a glorious corporate history, this is nothing less than impressive. After all, Rivian only started production of its R1T e-pickup this September, and the first deliveries won’t begin until October 2021. The first margin is said to have included just 156 vehicles. That should bring tears to the eyes of BMW and other classic automakers.

The perfect timing

Rivian is clearly hitting the spot with its R1T. This is abundantly clear in light of the furious IPO. But what makes the young e-car maker so exciting? A look at the pickup truck, which is causing quite a stir in the U.S. and will soon be doing so globally, can help. Many have been waiting a long time for Tesla’s cyber truck, which is not due to go on sale until next year. Now it seems Rivian has offered an equivalent to the planned e-SUV even before the big car maker under CEO Elon Musk. And production is likely to accelerate further in the right direction given the big stock market success. According to Rivian, 180 R1Ts were produced in October.

By the end of 2021, the number of vehicles produced is still expected to increase to 1,200. But it does not remain only with a vehicle. In addition to the pickup, Rivian also has a somewhat more “compact” SUV on offer. Production of the R1S is scheduled to start this year. If Rivian wants to get its vehicles into circulation more quickly, it will have to look for more skilled personnel. The young company currently employs just under 9,000 people. Given the now surely rapidly increasing demand, however, job postings are most definitely already in the works.

Famous supporters

Rivian didn’t make it from 0 to 100 without suitable support. Rather, there are two well-known corporations that believed from the beginning that it could compete with Tesla. On the one hand, there is the giant U.S. car company Ford, which holds a total of 12 percent shares in Rivian Automotive. The latter can boast not only a lot of money, but also expertise in the field of car manufacturing.

In contrast, Amazon is a no less famous company that will likely provide Rivian with IT and sales support in the future. The online shipping giant holds an even larger stake of 20 percent in the Tesla competitor and is already planning for the future. For example, Amazon has already ordered 100,000 Rivians, which will be used as environmentally friendly delivery vehicles in the future.

Losses despite stock market success

Let’s not kid ourselves. In the U.S., companies operate differently than they do here. Across the pond, the rule of thumb is that you first have to incur debt in order to be able to make big profits at some point. It is therefore not surprising that Rivian has so far not made any profits, but only losses. This trend is not expected to change in the third quarter. In the stock exchange prospectus dated November 1, 2021, there is talk of losses of 1.275 billion US dollars. If one believes the statements of Rivian, this negative trend is not to change for the time being. However, if the new player in the ever-growing game of e-car manufacturers follows up his visionary words with actions, profits will not be long in coming.