Rivian Automotive Inc. (NASDAQ: RIVN) Cruises to $100B Valuation after IPO

Rivian Automotive (NASDAQ: RIVN), an electric vehicle (“EV”) startup that has been compared to Tesla, recently went public in an IPO that is said to be the biggest for an American company since Facebook — and the biggest in the world this year. The California-based electric truck maker went public on Wednesday with its shares trading at $78 each, but by the end of its first day as a publicly traded company, Rivian shares were trading at more than $100, giving the company a valuation of $88 billion. On Thursday, Rivian’s shares went up by 30%, pushing the company’s valuation to more than $100 billion and making the EV maker more valuable than General Motors or Ford, one of its most significant backers.

Despite having sold zero electric vehicles, save for the few that were distributed among its employees, Rivian is now the second-most valuable American company after EV pioneer Tesla. Detroit-based General Motors, which is now less valuable than Rivian, sold more than 6.8 million cars worldwide last year and is one of the largest auto manufacturers globally.

Even Tesla, whose shares have reached astronomic highs, was already delivering EVs to customers when it went public in 2010 and received a valuation of $1.7 billion at the time. Still, investors have banked on Rivian as they expect EV sales to increase exponentially in the next few years, and the California companys is uniquely positioned to profit from increasing EV demand due to its electric trucks.

Rivian is still a fairly small firm, and it plans to start slow; the EV maker will manufacture 1,000 EVs this year before slowly ramping up production. The firm has already unveiled its R1T electric truck, the first production model electric truck, and plans on launching an electric R1S SUV in December. Regulatory filings indicate that Rivian already has 55,400 pre-orders for its electric truck, and the company hopes to increase production to a million EVs annually within a decade. Rivian has had a couple of high-profile backers, including Ford, which invested half a billion dollars back in 2019.

Global investment management firm T. Rowe Price led three funding rounds, co-led the fourth round, and currently owns more than 133.6 million shares (19%) worth around $9.9 billion. Amazon invested billions of dollars for a 20% stake and will be the EV startup’s largest client company once it starts production. The e-commerce giant has ordered a whopping 100,000 custom-made electric vans from Rivian as part of its efforts to cut its carbon emissions and help preserve the environment.

The path Rivian is taking and the success the company has seen during its first days of trading provides plenty of impetus for other EV startups such as Lordstown Motors Corp. (NASDAQ: RIDE) as the success of the IPO indicates a hunger for EVs among motorists.

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