Rivian IPO: Amazon’s favorite electric car company is now worth more than Ford or GM

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Rivian went public on Wednesday, scoring the largest IPO in the United States since 2014. The electric pickup and SUV maker valued its shares at $ 78 per share and raised about $ 12 billion, which the company plans to spend to increase production and design more vehicle models. While that price set Rivian’s valuation at around $ 70 billion, the automaker’s market cap has soared above. $ 90 billion, after the stock began trading at nearly $ 107 per share on its first day.

Rivian filed for an initial public offering return in August. The 12-year-old company, which is backed by Amazon and considered to be one of the biggest threats to Tesla, is now one of the most valuable automakers in the world, well worth the effort. billions more than Ford or GM – even though only 156 vehicles were delivered in October. Rivian’s first vehicle, a $ 73,000 pickup truck, began shipping in September and a second model, a $ 75,500 seven-seater SUV, is expected to be released next year.

Rivian’s timing is good in some ways. This summer, President Joe Biden issued an executive order that electric vehicles account for half of all new car sales in the U.S. by 2030, and a growing number of legacy automakers have pledged to shift their production to electric vehicles in the next two decades.

But as the world continues to struggle with the pandemic, Rivian faces some serious challenges. The shortage of semiconductors has caused production delays and stoppages across the automotive sector. There aren’t even those many charging stations available in the US, leaving some potential EV buyers worried about running out of juice.

“It’s a big deal that more public infrastructure is available,” Jeremy Michalek, a professor of engineering and public policy at Carnegie Mellon, told Recode in August. “Probably the first priority is making sure there are enough fast chargers available in the motorway service areas so that you can take your vehicle wherever you want to go.”

Like Tesla, Rivian is I sell household chargers Other development of a nationwide charging network. The company expects to have 10,000 stations available by the end of 2023, many of which will be in remote areas. Also, as Tesla did, Rivian is taking an AI-centric approach to its vehicles. Rivian has invested heavily in its hands-free and semi-autonomous driving technology with a suite of features called Driver +, which sounds a lot like Tesla’s autopilot. In one lawsuit, Tesla even accused Rivian of stealing his trade secrets afterward hire his former employees.

But one big difference between Rivian and Tesla is the type of electric vehicles the two companies sell. After being founded in 2009 and going under the radar for years, Rivian announced in 2018 that its first models would be a pickup truck and SUV designed for off-road driving. This is a notable difference from Tesla, which has mainly focused on selling cars and crossovers. (Tesla announced its first pickup truck, the Cybertruck, in 2019, but deliveries have been postponed to 2022.)

Rivian also caters to commercial clients, including its influential supporters. After participating in two rounds of funding for startup, Amazon last year pledged to purchase 100,000 electric delivery vehicles from Rivian by 2030. Former Amazon CEO Jeff Bezos and three other passengers on Blue Origin’s first human-on-board flight also driven in a Rivian SUV to the launch site.

Ford, which plans to release an electric version of its popular F-150 pickup next year, has also invested more than half a billion dollars when starting the electric car.

The difficult timing of Rivian’s IPO

There is no doubt that Biden is enthusiastic about electric vehicles. The Biden administration has already begun to electrify the the entire federal fleet of cars, SUVs and trucks, more than 600,000 vehicles. Meanwhile, the White House and Congressional Democrats are pushing for the postal service purchase up to 165,000 electric delivery trucks. The latest version Biden’s bipartisan infrastructure proposal includes $ 7.5 billion to build a nationwide network of electric vehicle chargers. (So ​​Tesla CEO Elon Musk has Start to open Tesla Supercharger a electric vehicles from other manufacturers.)

But as electric vehicles are becoming more popular globally, the US faces slower growth than China or Europe. Last year, the global sales of electric vehicles grew 41 percent, according to the International Energy Agency, an intergovernmental energy policy advisory organization. While sales of electric vehicles in the United States are lower than those in China and Europe, sales of hybrid cars they are growing, a sign that more consumers may prefer electric vehicles across the board.

In a recent Pew survey, about 7% of Americans said they own an electric or hybrid vehicle, and 39% said they would consider buying one. The highest price of electric vehicles it is definitely a contributing factor at the slowest adoption rate in the United States. But the price of batteries, which are i cost law part of electric vehicles, it is decreasing, so Americans may see cheaper electric vehicles in the future.

The obstacles of the pandemic era have also plagued the auto industry. Rivian, which was originally supposed to release its pickup truck in July, has twice postponed the delivery of the vehicles. Late last month, Rivian founder and CEO RJ Scaringe told customers that they had pre-ordered the vehicles that Covid-19 had interfered with everything from “building structures, installing equipment, to supplying vehicle components (especially semiconductors).” The same chip shortage forced Tesla to rewrite the code for his vehicles, and experts fear that the lack of semiconductors could delay production of the new electric Ford F-150.

However, if Tesla’s overwhelming success is any indication, Rivian is able to find eager, outdoorsy customers who want an electric vehicle that goes off-road. Considering the current challenges, the company is striving to differentiate itself from Tesla and the growing number of legacy automakers who want a slice of the electric vehicle market. GM will begin shipping an electric version of its GMC Hummer truck first the end of the year. And Jeep is planned to release an electric version of his Wrangler by 2023. President Biden has already taken a test drive of it.

Update, November 10, 2.15pm: This story has been updated to include news of Rivian going public.

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