Rivian IPO: Amazon’s favorite electric car company is now worth more than Ford or GM

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Rivian was published on Wednesday, Marking the largest IPO In the United States since 2014. The electric pickup and SUV manufacturer set a price of $ 78 per share and raised about $ 12 billion, which the company plans to spend to boost production and design more vehicle models. Although that price set Rivian’s valuation at about $ 70 billion, the carmaker’s market capitalization rose. $ 90 billion, after trading its stock for nearly $ 107 on its first day.
Rivian archived for an initial public offering return in August. The 12-year-old company, backed by Amazon and believed to be one of the biggest threats to Tesla, is now one of the most valuable automakers in the world, well worth it. Billions more than Ford or GM – although, since October, it has delivered only 156 vehicles. Rivian’s first vehicle, a $ 73,000 pickup, began shipping in September, and a second model, a $ 75,500 seven-seater SUV, is due to be released next year.
It’s a good time for Rivian somehow. This summer, President Joe Biden issued an executive order requiring electric vehicles to take over half of all new car sales in the United States. By 2030, and more and more successor automakers are committed to changing their production to electric vehicles over the next two decades.
But as the world continues to struggle with the pandemic, Rivian faces some serious challenges. The lack of semiconductors has caused delays and production disruptions in the automotive industry. That’s not even there lots of loading sites It’s available in the US, leaving some potential EV buyers worried about running out of juice.
“The big problem is having more public infrastructure,” Jeremy Michal, a professor of engineering and public policy at Carnegie Mellon, told Recode in August. “Probably the first priority is to have fast enough chargers available at highway rest areas so you can take the vehicle to where you want it.”
Like Tesla, it’s Rivian selling home chargers and developing a national cargo network. The company expects to have 10,000 stations available by the end of 2023, many of which will be in remote areas. Also, as Tesla has done, Rivian is taking an AI-focused approach to its vehicles. Rivian has invested heavily in semi-autonomous hands-free driving technology A set of functions called Driver +, Which bears a strong resemblance to Tesla’s autopilot. In a lawsuit, Tesla also accused Rivian of stealing his trade secrets hiring its former employees.
But the big difference between Rivian and Tesla is the type of electric vehicle the two companies sell. Founded in 2009 and kept secret for years, Rivian announced in 2018 that its first models would be a pickup truck and an SUV. driving off-road. That’s the notable side of Tesla, which is mainly focused on selling cars and crossovers. (Tesla announced its first pickup truck, Cybertruck, in 2019, but shipments have been made Delayed until 2022.)
Rivian also attracts commercial customers, including its sponsors. After participating in two rounds of funding for the Amazon startup last year It has pledged to purchase 100,000 electric vehicles From Rivian to 2030. Former Amazon director Jeff Bezos and three other passengers were included in the first flight of Blue Origin including humans. Rivian was riding in an SUV to the launch site.
Ford, which plans to release an electric version of its popular F-150 pickup truck next year, has invested more than that. half a billion dollars enter when the electric car starts.
A difficult time for Rivian’s IPO
There is no doubt that Biden is enthusiastic about electric vehicles. The administration of the roads has already begun to be electrified the entire federal fleet of cars, SUVs and trucks, More than 600,000 vehicles. Meanwhile, the White House and Congress Democrats are pushing for the Postal Service Purchase of 165,000 electric trucks. The latest version Biden’s bilateral infrastructure proposal includes $ 7.5 billion to build a national network of electric vehicle chargers. (Elon Musk, CEO of Tesla, also did it started To open Tesla Superchargers electric vehicles from other manufacturers.)
But while electric vehicles are more popular around the world, the U.S. has slower growth than China or Europe. Last year, global sales of electric vehicles it grew by 41 percent, According to the International Energy Agency, according to the intergovernmental energy policy advisory body. US electric vehicle sales lag behind in China and Europe, while hybrid car sales they are growing, a sign that more consumers may heat up electric vehicles.
In one recent Pew survey, 7 percent of Americans said they owned an electric or hybrid vehicle, and 39 percent said they would consider buying one. Higher price of EVs it is certainly an auxiliary factor Slower US adoption rate. But the price batteries, which are the most expensive part the decline in electric vehicles is declining, so Americans may see cheaper electric vehicles in the future.
Obstacles during the pandemic have also hit the auto industry. Rivian, who was due to release the truck in early July, delayed delivery of the vehicles twice. At the end of last month, RJ Scaringe Rivian was the founder and CEO he told customers who had booked the vehicles in advance Covid-19 interfered with everything from “the construction of facilities, the installation of equipment, the supply of vehicle components (especially semiconductors).” Tesla forced the same chip shortage rewrite its vehicle code, and experts are concerned that the lack of semiconductors could delay production of the new Ford F-150 electric.
However, if Tesla’s fleeting success is indicative, Rivian will find eager, open-air customers who want an electric vehicle that goes off-road. Given today’s challenges, the company is leaning hard from Tesla and EV with a growing number of legacy manufacturers wanting a share of the market. GM will begin delivering the electric version of the GMC Hummer truck before that at the end of the year. And it’s a Jeep was expected to release its electric version of the Wrangler by 2023. President of Biden he has already given a test to one.
Updated November 10, 2:15 pm: This piece was updated to include what Rivian had made public.
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