Rivian just became the largest stock market debut in history.
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On Wednesday, Rivian became the biggest US IPO since 2014 after it began trading on the New York Stock Exchange (NYSE) at a price of $107 per share. The electric pickup and SUV manufacturer priced its stock at $78 a share and raised about $12 billion, which it will spend on increasing manufacturing and developing new vehicle models. While setting Rivian’s value at around $70 billion, the company’s market capitalization rose above $90 billion after it started trading at nearly $107 a share on its first day.
In August, Rivian filed for its initial public offering. Even though the 12-year-old company is backed by Amazon and is viewed as one of the most dangerous threats to Tesla, it is now worth billions more than Ford or GM — even though it has only delivered 156 vehicles since September. The first vehicle from Rivian, a $73,000 pickup, began shipping in September, while a second model with capacity for seven passengers will be available next year for $75,500.
In some ways, Rivian’s arrival is timely. In June, President Joe Biden signed an executive order requiring that half of all new automobile sales in the United States by 2030 be electric, and a growing number of legacy manufacturers have committed to shifting their production to battery-powered cars in the next two decades.
Rivian, on the other hand, is operating in an industry that is still trying to recover from the pandemic. A lack of semiconductors has caused delays and production shutdowns in the automotive sector. There aren’t enough charging stations available across the United States, which worries some potential EV buyers about running out of charge.
“It’s a big deal that more public infrastructure is accessible,” Jeremy Michalek, an engineering and public policy professor at Carnegie Mellon University, told Recode in August. “The first priority is to ensure that there are enough fast chargers available on highway rest stops so you can drive anywhere you want.”
Rivian is selling home chargers and constructing a nationwide charging infrastructure, much like Tesla. The firm wants to have 10,000 stations accessible by the end of 2023, with many of them located in remote areas. Rivian is also adopting an AI-focused approach to its vehicles, as Tesla has done. Rivian has put a lot of money into its hands-free, semi-autonomous driving technology with Driver+, which sounds a lot like Tesla’s Autopilot. After recruiting some of Tesla’s former employees, Rivian was accused by Tesla of stealing trade secrets.
Another key distinction between Rivian and Tesla is the type of electric vehicles they are selling. After being established in 2009 and remaining hidden for years, Rivian teased in 2018 that its initial models will be a pickup truck and an off-road vehicle. That’s a significant difference from Tesla, which has concentrated on selling automobiles and crossovers since it was founded in 2003. (Tesla debuted the Cybertruck in 2019, but deliveries have been put off until 2022.)
Rivian is also looking for commercial business, including those with its own powerful supporters. Following its participation in two funding rounds for the firm, Amazon announced that it plans to buy 100,000 Rivian electric delivery vehicles by 2030. Jeff Bezos and three other passengers on Blue Origin’s first flight with humans aboard took a Rivian SUV to the launch site.
The electric car firm, which has a new plan to release an electric variant of its well-known F-150 truck in 2019, has received more than half a billion dollars from the likes of Google and Toyota.
The problem with Rivian’s IPO was its tricky timing.
As Joe Biden’s campaign for the 2020 Democratic presidential nomination gains speed, it is clear that he is a big supporter of electric vehicles. There’s no denying that Joe Biden is a passionate advocate for electric automobiles. The Biden administration has already begun to convert the whole federal vehicle fleet to all-electric cars and SUVs, which totals more than 600,000 vehicles. Meanwhile, the White House and congressional Democrats are pushing for the Postal Service to acquire as many as 165,000 electric delivery trucks. $7.5 billion is included in the most recent version of Biden’s bipartisan infrastructure plan to establish a national network of electric vehicle chargers. (The Tesla CEO Elon Musk has already begun allowing other manufacturers’ electric cars to use Tesla Superchargers).
While worldwide electric vehicle sales are increasing, the US experiences slower growth than China or Europe. Last year, worldwide electric car sales increased by 41%, according to the International Energy Agency, an intergovernmental energy policy advising organization. While electric vehicle purchases in the United States trail behind those in China and Europe, hybrid automobile sales are growing, suggesting that more customers could be attracted to electric vehicles in the future.
