It might not seem logical, but the Rivian IPO is one that came into 2021 as the biggest of the year, which is huge news in the auto world.
Some companies just know how to make an entrance. Upstart electric automaker RivianAutomotive (known around NASDAQ as RIVN.O) made quite a sensation in its stock market debut on November 10. With an initial public offering of $78 per share, prices jumped past $100 by the end of trading.
That was followed by another 30 percent increase the following day, pushing its value over $100 billion, making it the biggest IPO in 2021 and the largest since Facebook’s 2021 IPO, according to Bloomberg data. It also leapfrogged nearly every other U.S. automaker, becoming the second most valuable auto company, second only to Tesla.
Not a Household Name. Yet
While folks in the automotive industry are familiar with Rivian, it isn’t exactly a household name compared to, say, General Motors or Ford.
But the tiny California-based company has some pretty massive muscle backing it up in Amazon, Ford, T. Rowe Price, and BlackRock. There are reports that Amazon intends to use Rivian electric vehicles in its delivery fleet. This brings us to another fascinating aspect of Rivian’s meteoric rise.
Where are Rivian’s Sales?
Rivian introduced the R1T electric truck—its first production vehicle—back in September, beating Tesla’s much-hyped Cybertruck to the electric truck market. It is also planning to debut the R1S, its electric SUV, by the end of 2021, with the Amazon delivery vans not far behind.
Yet, it hasn’t recorded any sales revenue or delivered any vehicles to customers thus far, although the company reports orders for over 55,000 vehicles.
By comparison, when Tesla went public over a decade ago, it was already delivering its vehicles to customers. And concerns about Rivian’s ability to scale its production have some experts urging caution.
Like other automakers, including Tesla, Rivian has faced supply chain issues that have hampered its efforts to ramp up production of its electric pickups. There are some concerns that the manufacturer won’t be able to deliver the 1,000 vehicles it pledged to customers by the end of the year in its pre-IPO filing.
Investors are Fully Charged
Even with some investment experts pumping the brakes, investors remain bullish about Rivian. It certainly didn’t hurt that they went public during the United Nations Climate Summit, where electric vehicles were no doubt a hot topic. By the end of its first week in the NASDAQ, it was trading at $123 per share.
Small Automaker Makes a Big Splash
Even before its sensational IPO, electric automakers like Tesla and Rivian were creating huge ripples throughout the automobile industry.
Even with increasing pressure from governments to cut vehicle emissions, larger car makers seemed slow to shift toward alternative fuel vehicles. Established manufacturers like Tesla, as well as startups including Rivian, Lucid, and many others, have motivated larger automakers to ramp up production of hybrid and all-electric vehicles.
Having raised over $12 billion in its IPO, Rivian is well-positioned to see through the supply chain hiccups and poised for rapid growth in the coming years.
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