Rivian’s first product, the 2022 R1T full-size pickup, is in production and the first impressions, even from us, are positive.
This appears to bode well for the company’s efforts to raise additional funds, as the recent initial public offering shows.
Rivian set the price of a share in its IPO at $ 78, which was higher than many expected. However, the IPO was oversubscribed and when the shares started trading Wednesday on the Nasdaq Global Select Market index, under the RIVN symbol, the price exploded to the upside.
Rivian’s stock price ended the day at $ 100.73, up 29%. Based on the number of shares outstanding, Rivian’s market value is now $ 85.9 billion, which roughly equates to General Motors at $ 86 billion and tops Ford at $ 77.4 billion. Tesla, of course, is much larger, valued at over $ 1 trillion.
We remind you that Rivian delivered only 156 examples of the R1T at the end of October and expects to reach that figure up to 1,000 units by the end of 2021.
Rivian managed to raise $ 11.9 billion by going public, making Rivian’s IPO the seventh largest on record. The figure is likely to rise as underwriters have an option to purchase up to 22.95 million additional shares at the opening price of $ 78.
Rivian builds first example of R1T for customers – September 2021
Demand for Rivian stock would always have been strong given the current frenzy around electric vehicle startup listings. However, unlike many of its rivals, Rivian is already building a credible product, and the company has indicated that key investor Amazon, which had a 20% stake in Rivian prior to listing, along with other equity investments, plans to buy more shares. Ford is also a key investor in Rivian.
Both companies also have agreements with Rivian for vehicle development programs. Amazon commissioned Rivian to build 100,000 electric vans. A handful of vans were delivered earlier this year, and Amazon hopes to have the entire fleet operational by 2030.
Ford said it will use Rivian’s skateboard platform for an unspecified future EV. Rivian was also supposed to build a Lincoln EV at its Illinois factory, but that project was canceled in April 2020 when the coronavirus pandemic took hold.
In previous documents, Rivian revealed it was burning up serious money as it ramped up for September start of production of the R1T, with losses for the first half of 2021 standing at $ 994 million, which was almost the total amount the company lost in 2020 and roughly double what it lost in 2019.
Most of the costs have been associated with R&D spending, and this decline is set to continue through the end of 2023. The company expects its losses to amount to approximately $ 8 billion by that date as it seeks to expand its business. its production capacity, including the production of batteries, and add new templates. Rivian said that after the United States, it will focus on expanding into Western Europe before expanding into Asia.
A conventional IPO is unusual for an electric vehicle startup, as most have opted for the quickest route of going public through so-called “reverse mergers” with shell companies of special purpose acquisition companies (SPACs).