Electric vehicle maker Rivian mounts hype over ‘Next Tesla’ to $ 100 billion valuation despite almost no sales – .

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Electric vehicle maker Rivian mounts hype over ‘Next Tesla’ to $ 100 billion valuation despite almost no sales – .


Rivian Automotive, a company that shipped around 150 electric pickup trucks, mostly to its employees, surpassed General Motors on Thursday as the second most valued American automaker.
The California-based company went public on Wednesday in an IPO that priced the shares at $ 78 each. By the end of its first day as a public company, those stocks were worth over $ 100, enough to value the company at $ 88 billion. It’s more than Ford.

Shares rose another 30% on Thursday, pushing the company above the valuation of US $ 100 billion. That’s more than GM of Detroit, one of the world’s largest automakers, which sold more than 6.8 million vehicles worldwide last year.

Rivian’s IPO is the largest in the world this year, and the largest by an American company since Facebook, according to data compiled by Bloomberg. But despite high valuations and high ambitions, the company is tiny. Its goal is to produce 1,000 electric vehicles this year. The company launched its first vehicle, the R1T electric truck, in September and plans to launch its electric SUV, the R1S, next month.

Although the company has yet to record revenue from vehicle sales, regulatory documents suggest it already has 55,400 orders for its vehicles on record.

Ford is one of Rivian’s main backers, having invested half a billion dollars in the company in 2019. The other is Amazon, which held a 20% stake in Rivian before the IPO. Amazon is not only a funder of the business, but it’s also poised to be its biggest customer, as the e-commerce giant wants to use Rivian vehicles for its delivery fleet.

Rather than focusing on the number of vehicles sold, investors anticipate vast potential for Rivian with the growing appetite for electric vehicles.

While a $ 100 billion valuation is no small feat, it is still paltry compared to that of Tesla, the electric vehicle maker it is most often compared to, which is currently worth over $ 1,000 billion. . Tesla has sold around 627,300 vehicles so far this year.

Rivian’s IPO is the largest in the world this year, despite the company’s paltry sales figures. (Brendan McDermid/Reuters)

Some in the investment community say that, just like Tesla’s rally to become the world’s most valuable automaker, Rivian’s value is also a sign that valuations have spiraled out of control.

“Despite the popularity of the electric vehicle market and the huge gains from Tesla shares, we believe investors should avoid the temptation to buy Rivian shares,” investment research firm New Constructs said of the company. before the IPO.

The company notes that when Tesla went public in 2010, it was valued at US $ 1.7 billion, and it was at least already delivering vehicles to paying customers, and was on track to sell 1,500 in that first year. . That’s more than what Rivian says he’ll do, even though he’s now worth around 50 times what Tesla was worth at the time.

“Buying the stock at such a high price before the company has shown that it can still produce more than a handful of cars seems ridiculous to us,” New Constructs said. “Investors shouldn’t buy a stock just because it’s in a hot industry. “

Tesla has accumulated a market value of over $ 1,000 billion. So far this year, it has sold around 627,300 vehicles.

Tesla CEO Elon Musk made headlines this week for selling a huge stake in his company based on the results of a Twitter poll, and also because he could have to foot a big bill for taxes next year.

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