Elon Musk on Rivian, the biggest IPO of the year

Amazon backed Rivian Inc. Stock prices surged as much as 53 per cent in its Nasdaq debut on Wednesday, flowing in $12 billion in fresh cash on the first day of its trading giving a  market capitalization of more than $100 billion.

That made Rivian IPO the world’s biggest initial public offering this year and the second most valuable U.S. automaker after Tesla Inc. Amazon.com Inc is Rivian’s largest shareholder with a 20 per cent stake.

The figure could rise to $13.7 billion if the full over-allotment of shares is exercised. Rivian IPO is also the biggest U.S. IPO since Alibaba Group Holding Ltd went public in September 2014.

“The transition to a public company (and) the growth in our capital base” enables Rivian to develop “promising products and volume and growth in terms of new segments and new vehicles that we’ll be going into,”said Rivian Chief Executive R.J. Scaringe. 

Rivian has relatively modest goals compared to other EV makers and currently focuses on building vans for Amazon who owns 20% stakes in the company. It has received around 55,000 preorders for its pricey electric pickup truck (the R1T) and SUV (the R1S) and has informed that the company won’t be able to deliver all of those orders until the end of 2023.

Rivian Motors a competitor to Tesla and Lucid? 

Rivian Automotive Inc. reached a market value of over $100 billion two days after its initial public offering. Whereas Tesla Inc.which went public in 2010 with a market cap of $2 billion and couldn’t reach $90 billion until 2020. On the other hand, Fourth most valued EV maker Lucid Motors came public this year via a merger with SPAC on 26th July with a market cap of $24 billion and now stands at a $71.96 billion  valuation after a public offering of three months. 

Tesla Inc.currently has a market cap of $1 trillion and its stocks are trading at $1028.06, down another 3.35% after Elon Musk’s stocks selloff. Rivian shares soared as much as 24% on Thursday and at the time of writing this article it was valued at $128.18, up 67% since its debut on Wednesday. At the same time Lucid Motors stocks were trading at $42.97. LCID stocks have nearly doubled in the past few weeks as deliveries of its Lucid Air luxury sedan began.

Among other U.S. automakers vying for EV market share, General Motors (GM) has a market cap of $90.9 billion, versus. Ford’s (F) $77.5 billion on Friday morning.

Rivian R1T beat Tesla and General Motors to become the first to deliver a fully-electric truck model as the EV market for trucks heats up.

On November 12, Elon Musk tweeted that Rivian’s true test will be achieving high production and having a breakeven cash flow and that Tesla is only American carmaker to reach high volume production & positive cash flow in past 100 years

Rivian wants to hit the nail right on head

The Irvine, California-based company plans to follow R1T Truck with an SUV and delivery van, hitting some of the hottest sectors  in the market.

It also aims to build at least one million vehicles a year by the end of the decade, Scaringe said. The EV maker currently has a unit in Illinois only, and has announced plans to open a second manufacturing unit in the United States and eventually build production units in China and Europe.

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