Shares of Rivian surged as much as 53 percent in its Nasdaq debut, giving the Amazon-backed electric vehicle maker a market valuation of more than US$100 billion after the world's biggest initial public offering this year.
That made Rivian the second most valuable US automaker at one point behind Tesla, which is worth US$1.01 trillion.
Despite just having started selling vehicles and having little revenue to report, Rivian ranked ahead of General Motors at US$85 billion; Ford at about US$77 billion, and Lucid at US$65 billion before it pared some gains.
Since last year, EV companies have emerged as some of the hottest investments. Including securities such as options and restricted stock units, Rivian's fully diluted valuation exceeded US$106 billion at its debut price.
The IPO allows Rivian to raise about $12 billion to fund growth, and that figure could rise to US$13.7 billion if the full over-allotment of shares is exercised.
"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," Rivian Chief Executive RJ Scaringe said in an interview.
Amazon.com is Rivian's largest shareholder with a 20 percent stake.
Rivian's IPO comes against the backdrop of the United Nations Climate Summit, where automakers, airlines and governments unveiled a raft of pledges to cut greenhouse gas emissions from global transport.
GM CEO Mary Barra said Rivian's IPO only showed how undervalued her company is.
"What it highlights to me is the huge opportunity," she said at a New York Times event. "General Motors is so undervalued."
ONE MILLION VEHICLES PLAN
Rivian has been investing heavily to ramp up production, doubling down on its upscale all-electric R1T pickup truck, which was launched in September. It plans to follow that with an SUV and delivery van, hitting some of the hottest segments in the market.
The Irvine, California-based company plans to build at least one million vehicles a year by the end of the decade, Scaringe said.
It has a plant in Illinois, and has announced plans to open a second US factory and eventually setting up production in China and Europe.
"Rivian is in the early stages of delivering its first vehicles to customers, which tells investors the company and vehicles are 'real' and not merely pictures in a slide deck," D.A. Davidson & Co analyst Michael Shlisky said. "This has been an issue with other EV companies in recent months."
On Wednesday, 10 environmental and advocacy groups, including Sierra Club, Greenpeace and others, called on Rivian to engage with labor unions as the company grows. Workers at Rivian's plant in Illinois are not unionised.
Founded in 2009 as Mainstream Motors by Scaringe, the company was renamed in 2011 as Rivian, a name derived from "Indian River" in Florida, a place Scaringe frequented in a rowboat as a youth.
Like other electric vehicle startups, Rivian aims to ride the growing demand for zero-emission vehicles to a position that rivals market leader Tesla.
While further back on the growth curve than Tesla and its Chief Executive Officer Elon Musk, here are five areas where the Irvine, California-based Rivian and CEO RJ Scaringe compare with the EV market leader.
MARKET CAP
Tesla, founded in 2003, is the most valuable carmaker in the world, but its stock declined recently after Musk polled Twitter users about selling 10 percent of his stake in the company.
Despite briefly falling out of the US$1 trillion market-value club, Tesla rallied and its market cap now stands at US$1.01 trillion.
That makes it the second most valuable US automaker, ahead of General Motors, Ford Motor and Lucid.
GLOBAL SALES
Tesla delivered more than 600,000 vehicles from January to September this year. Once two additional factories under construction open later this year, sales will rise further. Tesla's revenue in the third quarter rose 57 percent to US$13.76 billion from a year earlier.
Rivian just started selling its first vehicle, the R1T pickup truck.
ASSEMBLY PLANTS/EMPLOYEES
Tesla has assembly plants in Fremont, California and near Shanghai and is building factories in Austin, Texas, and Berlin. At the end of last year, Tesla employed almost 71,000 people globally.
The two existing plants will have annual production capacity of 1 million vehicles by the end of 2022, and that will double once two additional plants open, according to estimates by Wedbush.
Rivian has an assembly plant in Normal, Illinois that can build 150,000 vehicles a year and will expand to 200,000 by 2023. It has said it will build a second U.S. plant and eventually plans to add factories in China and Europe. Rivian currently employs 9,500 people.
Rivian's Scaringe told Reuters the company is aiming to build at least one million vehicles a year by the end of the decade.
TYPES OF VEHICLES
Tesla's Model 3 sedan is the best-selling electric car in the world. It also offers the Model S sedan, Model X SUV and Model Y crossover. It plans to eventually offer the Cybertruck electric pickup, a second-generation roadster and a Class 8 semi-trailer truck.
Rivian currently builds the R1T pickup in Illinois and will soon add the R1S SUV as well as a delivery van for its largest shareholder Amazon. It has said other vehicles off the R1 platform will be added by 2023, including lower-priced models according to Scaringe. It also plans to add other commercial vehicles on top of the Amazon van, he said.
PARTNERS
Tesla has taken more of a go-it-alone route, vertically integrating production of battery cells and design of self-driving chips.
Rivian has a deal to provide Amazon, which has a 20 percent stake in the startup, with 100,000 vans by 2025. In addition, Ford, another large stakeholder, has repeatedly said its investment in Rivian is strategic, even though it previously canceled the Lincoln SUV that would have been built on a Rivian platform. Rivian also intends to vertically integrate production of battery cells.
REUTERS
