The EV automaker, which launched production of its R1T pickup truck in September, is now worth nearly as much as Ford and General Motors. Investors may have their sights set even higher, hoping Rivian will become the Tesla of trucks, which has a market cap north of $1 trillion.
“I think what’s happened from a valuation perspective, electric vehicle stocks are being more and more treated like disruptive technology rather than auto players,” said Dan Ives, managing director of equity research at Wedbush Securities. “And Tesla’s really paved the way there.”
Rivian offered 153 million shares of common stock priced at $78 per share — above the high end of its target range, according to its IPO filing with the Securities and Exchange Commission. The company has 994 million total shares outstanding, valuing it at about $77 billion.
The stock began trading Wednesday on the Nasdaq under the ticker symbol RIVN, opening at $106.75 and climbing as high as $119.45 per share in midday trading.
Founded in 2009 by CEO R.J. Scaringe, a 38-year-old MIT grad, Rivian is building an electric truck and SUV, as well as 100,000 custom EV delivery vans for Amazon, an investor in the company. Rivian has raised about $10.5 billion from investors since 2019, a roster that also includes Ford Motor Co. and T. Rowe Price.
Amazon disclosed in an SEC filing last month it owned about a 20% equity stake in Rivian as of Sept. 30.
The $11.9 billion Rivian raised in its IPO is the most since Uber brought in $8.1 billion in 2019, and one of the largest ever offered on a U.S. exchange. It reflects the potentially transformative nature of EVs.
“We view it as the biggest transformation to the auto industry since the 1950s,” Ives said.
Ives projects EV market share to rise from its current 2% level to 25% of all vehicle sales by 2030, pushed along by government incentives and President Joe Biden’s $1.2 billion infrastructure bill, which includes $15 billion for EV build-out, including charging stations.
A measure for increasing the federal tax credit for EVs up to $12,500 is also on the table.
Rivian’s inaugural models feature 300-plus miles of range, go from zero to 60 mph in three seconds and start at $73,000 for the R1T truck and $75,500 for the R1S SUV, offset by a $7,500 federal tax credit for electric vehicles. The first trucks rolled off the line in September, while the SUV is expected to launch in December, according to the IPO filing.
As of Oct. 31, Rivian had received about 55,400 R1T and R1S preorders from customers who paid a refundable $1,000 deposit. Rivian reserved up to 7% of the IPO shares for U.S. customers who had standing preorders as of Sep. 30.
Ivan Drury, senior manager of insights for car shopping website Edmunds, said being the first-mover in EV trucks gives Rivian a boost in a fast-evolving market.
“We know this is the future … and Rivian has done it first, at least when it comes to the truck,” Drury said. “They’ve got the upper hand there.”
In July, Ford unveiled the F-150 Lightning at a special summer edition of the Chicago Auto Show. The $40,000 electric truck is due in dealerships by the middle of next year.
Drury said the lower price point of the Lightning could provide some traction against Rivian.
“With the Lightning, you’re just screaming at every potential customer out there,” Drury said. “If you can get into the Lightning for the low $30s with the rebate, you’re going to catch a lot of eyeballs.”
Drury expects some bumps in the road for Rivian during its first year in production, as it seeks to establish its service network, proprietary charging infrastructure and vehicle quality control.
“No car company pulls out a new product and everything’s seamless,” Drury said. “We’ve never seen that happen. Even existing automakers, they redesign a vehicle … and there’ll be some issues.”
Rivian has 3,400 employees working at its sole production facility, a converted Mitsubishi plant in Normal, a college town about 130 miles south of Chicago. The company, which is headquartered in Irvine, Calif., has about 9,500 employees overall.
The Normal plant can produce up to 150,000 vehicles annually, with plans to ramp up to 200,000 vehicles by 2023, according to the IPO filing. The company intends to produce approximately 1,200 R1T and 25 R1S models by the end of the year, according to the filing.
The launch edition of the R1T is sold out, but the Adventure, which has similar features and is also priced at $73,000 before the federal rebate, and the Explore, a slightly more utilitarian model priced at $67,500, are due out in January.
Drury said early demand for Rivian products is a promising start for broader adoption, despite a price point that is a “little high.” As competition for EV trucks heats up, Drury expects Rivian’s prices to come down.
Investors are betting on the opposite for Rivian’s stock price.
“It speaks volumes to the potential, and that’s really what people are banking on,” Drury said.
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