Amazon-Backed EV Startup Eyes $60 Billion Valuation

Written by Jennifer Clark
Posted November 3, 2021

Rivian Automotive is targeting a valuation of about $60 billion with its upcoming IPO. That IPO is expected to happen on November 10, 2021.

This would make Rivian’s IPO the biggest deal of 2021. It has set its target price at $57–$62 per share and plans on selling 135 million shares. At the high end, Rivian could earn as much as $9.6 billion from its market debut.

It will list on the Nasdaq with the ticker symbol “RIVN.” The company plans to do something a little differently when it comes to its public debut. According to the Securities and Exchange Commission filing, it will be selling a portion of its IPO directly to retail investors through SoFi’s online brokerage platform.

This agreement with SoFi is part of a trend that has been picking up momentum this year. More fintechs and brokerages like Robinhood (NASDAQ: HOOD) have been offering IPO shares to retail investors. Robinhood offered a portion of its IPO shares directly to users on its platform. Traditionally, getting in on the IPO price is nearly impossible for retail investors. 

Rivian Automotive is an electric vehicle startup that was founded in 2009. It designs and manufactures electric vehicles for consumers and commercial markets within the U.S. Since the company’s creation it has received about $10.5 billion from its investors.

A recent funding round in January had valued the company near $27.6 billion, and now it’s expected to be worth $60 billion after its IPO.

Rivian R1T Electric Truck

Rivian Brings First All-Electric Truck to Market

The company has already begun production on its first model, R1T, with plans to start the production on its second model, R1S, in December 2021. This massive IPO could help Rivian ramp up the production of its vehicles and to get them on the market so the company can start generating revenue.

As of September 30, 2021, Rivian had "approximately 48,390 R1T and R1S preorders in the United States and Canada from customers, who each paid a cancellable and fully refundable deposit of $1,000."

The company is just beginning to make the first round of deliveries of its electric pickup truck, which is one of the first to hit the market and could become a serious competitor for Tesla’s (NASDAQ: TSLA) upcoming Cybertruck — whenever that might become available.

The company’s CEO and founder, Dr. Robert J. Scaringe, has been with the company since the very beginning and earned his Ph.D. in mechanical engineering from the Sloan Automotive Laboratory at MIT, so you could say that Scaringe has some of the experience needed to run an automotive company. 

Big Investors for Rivian

This year has seen more discussions about climate change and the push toward zero-emission vehicles to reduce fuel and maintenance costs. In the upcoming years, there will most likely be more government incentives for businesses, organizations, and consumers to adopt zero-emission vehicles.

Rivian is coming to the market before the demand picks up. The company has some big-name investors, including Amazon (NASDAQ: AMZN), Ford (NYSE: F), and T. Rowe Price (NASDAQ: TROW).

Amazon recently disclosed that it owns a 20% stake in Rivian that equals about $3.8 billion, and Ford holds about a 12% stake. 

In addition to Amazon having a stake in Rivian, both companies entered into an agreement that indicates Rivian will develop 10,000 electric commerical delivery vans for Amazon. Rivian plans to get those vans to Amazon by 2022 and to deliver 100,000 by 2030. 

In addition to making electric vehicles, the company also will have a second plant in Texas that will produce EVs and battery cells. This will help Rivian achieve its goals of creating broader vertical integration. 

2022 Set to Be a Big Year for EV Manufacturing and Market

An IPO at the valuation Rivian is aiming for would make the company more valuable than Honda (NYSE: HMC). Rivian’s electric vehicle lineup comes as more traditional automakers are getting ready to debut their electric vehicles. 

In 2022, Ford is expected to release its F-150 Lightning, which will be the company’s all-electric truck. Even Swedish car manufacturer Volvo Car AB is planning to make electric vehicles exclusively by the end of the decade. 

According to a 2020 market research report by Grand View Research, the global market for electric trucks was estimated near $1.48 billion in 2019 and is forecasted to grow to $26 billion by 2027. This forecast represents a CAGR of 43.3% from 2020–2027.

2022 is going to be a big year for the electric vehicle market and that’s why we are now seeing these announcements from traditional automotive companies to creating a line of electric vehicles. And those companies that are ahead of the curve and are ready to give a product to consumers will likely benefit the most.

Rivian’s public debut is going to be huge, and it’ll be interesting to watch where the company goes after it becomes publicly traded. I’ll definitely be keeping an eye on Rivian.

Until next time,

Jennifer Clark
Pro Trader Today
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