The global race for electric vehicle domination is about to get more heated. Rivian, a builder of electric trucks and vans, is expected to go public this afternoon. The expected stock price at $70-$74 (top end of the range) will value nearly $70 billion.
A massive number considering the lack of products and sales. Rivian's market capitalization would be right below Ford Motors that is valued at $80 billion. Rivian's huge success highlights investors' faith in electric vehicle markets and the lack of a clear industry leader.
Under the symbol RIVN on the Nasdaq Exchange, according to the securities filing, Rivian will raise nearly $12 billion with offering prices of $78. After that, they will use the capital to scale up the product. Rivian had delivered only 156 pickups by the end of October, known as the R1T (forecasting delivery of 1,000 R1Ts by the end of 2021). While the company has 55,400 orders for trucks and S.U.V, these vehicles will not be delivered until the end of 2023.
Revenues have never been material, recording only $1 million in the quarter ending Sept. with $994 million loss in the first six months of 2021. Yet growth, storybook companies haven't needed to show solid financials in 40 years. Rivian has the confidence of critical partners Amazon and Ford, which invested over $10 billion in the company. Amazon, which has a significant stake, has ordered 100,000 electric delivery vans.
Whatever the outcome of today's IPO it highlights, automakers are wagering that consumers are ready to change to electric vehicles swiftly.