Electric vehicle maker with virtually no sales went public Wednesday and its already worth more than GM

Rivian Automotive, an electric vehicle company that has so far delivered only about 150 electric pickup trucks mostly to its own employees, surpassed General Motors Thursday to become the second most valuable U.S. car company behind Tesla.

The California company went public Wednesday in an initial public offering (IPO) that priced shares at $78 each. By the end of its first day as a public company, those shares were worth more than $100, enough to value the company at $88 billion. That's more than Ford is worth.

The shares rose another 30 per cent on Thursday to push the company above the $100 billion US valuation. That's greater than Detroit's GM, one of the biggest auto manufacturers in the world, which sold more than 6.8 million vehicles globally last year.

Rivian's IPO is the biggest in the world this year so far, and the biggest by a U.S. company since Facebook in 2012, according to data compiled by Bloomberg.

Big ambitions, tiny company

Despite lofty valuations and ambitions, the company is tiny. Its goal is to produce 1,000 electric vehicles this year. Rivian rolled out its first vehicle, the R1T electric truck, in September and plans to launch its electric SUV, the R1S, next month.

While the company has yet to record any revenue from vehicle sales, regulatory filings suggest it does have 55,400 orders for its vehicles already logged.

Ford is one of Rivian's high-profile backers, having invested a half-billion dollars into the company in 2019. The other is Amazon, which held a 20 per cent stake in Rivian ahead of the IPO. Amazon is not only a backer of the company, but it is also poised to be its biggest customer, as the e-commerce giant wants to use Rivian vehicles in its delivery fleet.

Rather than focusing on the number of vehicles sold, investors are anticipating vast potential for Rivian as the appetite for electric vehicles grows. 

While Rivian's $100 billion valuation is no small feat, it still pales in comparison to that of Tesla â€" the electric vehicle maker it is most often compared to â€" which is currently worth more than $1 trillion.

Tesla has sold about 627,300 vehicles so far this year. Rivian says it hopes to be producing one million vehicles a year within a decade.

Rivian's IPO is the biggest in the world this year so far, despite the company's paltry sales figures. (Brendan McDermid/Reuters) Investment research firm warns against buying shares

Some in the investment community say that much like Tesla's rally to become the most valuable car company on Earth, Rivian's value is also a sign that valuations have gotten out of hand.

"Despite the popularity of the electric vehicle market and huge gains in Tesla's stock, we think investors should avoid the temptation to buy Rivian shares," investment research firm New Constructs said of the company ahead of the IPO.

The firm notes that when Tesla went public in 2010, it was valued at $1.7 billion US, was at least already delivering vehicles to paying customers, and was on track to sell 1,500 vehicles that first year. That's more than Rivian says it will do, despite now being worth about 50 times what Tesla was worth then.

"To buy the stock at such a high price before the company has shown it can consistently 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 sector."

Tesla has amassed a market value of more than $1 trillion. So far this year it has sold around 627,300 vehicles.

Tesla CEO Elon Musk has been in the news this week for selling off a huge stake in his company based on the results of a Twitter poll, and also because he may have to pay a large tax bill next year.

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