Rivian IPO: Could Rivian be the Next Tesla?

Wednesday sees the long-awaiting initial public offering of Rivian – the hot new electric car manufacturer that’s hoping to be the next Tesla. Initial expectations are that it could be the largest IPO for a US company since Facebook came to Wall Street in 2012. But is Rivian worthy of the hype or is this the next big thing that’ll fail to fulfil its potential?

Rivian has only just started producing its electric vehicles, but it’s already being predicted that the California-based brand’s valuation could hit $67 billion at its IPO this week. Such impressive figures would eclipse the market cap for established car manufacturers like Hyundai and Honda.

Much of this optimism is based on the fact that Rivian’s Illinois-based factory has already started building delivery vans for Amazon. The ecommerce giant recently put in a staggering order for 100,000 electric delivery vans by 2025, and it’s a testament to the trust put in Rivian’s 38-year old founder RJ Scaringe.

While Rivian is only expecting to produce around 1,000 vehicles this year, it’s already being touted as the first rival to Tesla in the fledgling electric car market. The plan is that Rivian would use the funds generated from Wednesday’s IPO to optimize its Illinois factory to be able to produce 150,000 vehicles each year. This is in addition to further facilities in California, Michigan, British Columbia and the UK.

Rivian was founded in 2009 and it saw Scaringe quickly aiming to offer an alternative to the Tesla brand. Rather than focusing on a standard electric sports car, Rivian followed its own adventure brand template to offer something different.

As such there have been three vehicles showcased from Rivian so far. These include the R1T pickup truck, the R1S sport utility vehicle, and the aforementioned Amazon electric delivery vans. The most expensive Rivian electric cars are expected to reach up to 450 miles on a single charge.

Big things expected from the electric car market

Investors have already pumped in a staggering $75 billion into the electric vehicle industry in the past year. Much of this is based on the faith that emergent brands will be able to follow the trailblazing path set by Elon Musk’s Tesla that has gone from being a start-up to a trillion-dollar company in little more than a decade.

Everything from the climate change concerns to the supply chain crisis has encouraged a marked shift away from dependence on fossil fuels. As such, it’s little surprise to find that investors have poured in over $10 billion into Rivian in the past couple of years.

Amazon was one of key investors in Rivian having spent $700 million in an investment round in 2019. The investment was part of the ecommerce brand’s pledge to slash its carbon emissions. Plus with even rival car manufacturers such as Ford seeing the immense promise of Rivian, it looks like it could be the perfect time to invest in the electric car manufacturer.

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