NEW YORK: Rivian, an American automaker specializing in electric pickup trucks, sport utility vehicles and vans, announced Tuesday it had raised $11.9 billion in its Wall Street debut.
Backed by Amazon and Detroit automaker Ford, Rivian set its IPO price at $78 per share, according to a press release, and will issue 153 million new shares on Wednesday, up from the 135 million initially planned, due to high demand from investors.
This represents a valuation of $67.9 billion if stock options and other convertible shares are not taken into account.
The amount is well above what the company expected in early November when it proposed a range of between $57 and $62 per share.
Though the start-up has just taken its first vehicles off the assembly line, it is worth almost as much as Ford, which has a valuation of $80 billion and close to the $85 billion valuation of General Motors, guaranteeing it a splashy entry on the Nasdaq with the ticker symbol RIVN.
It announced its intention to go public in August and delivered its first pickup, the R1T, in September, with plans to debut its R1S SUV in December.
As of late October, it had an order backlog of 55,400 R1Ts and R1Ss that it expects to deliver by the end of 2023. Prices for the electric trucks and sport utility vehicles start from around $70,000.
Rivian also plans to deliver 100,000 vans to Amazon by 2030. The e-commerce giant has a stake of $3.8 billion in Rivian's preferable stock.
The company is taking advantage of investor enthusiasm for the electric vehicle sector, where star performer Tesla recently surpassed $1 trillion market capitalization.
The next Tesla?
Rivian was founded in 2009 by Robert Scaringe, a car enthusiast, who, after graduating from college, wanted to focus on less polluting forms of transportation rather than the traditional automobile.
After initially considering developing a sports car, he shifted towards larger vehicles in 2012.
The company's backers often view it as the new Tesla, but Edmunds executive director of insights Jessica Caldwell said the comparison is not necessarily warranted.
While Tesla released its first car "when no one else really cared about electric vehicles," Rivian "is coming out in a market that is more saturated," Caldwell told AFP.
"They're not going to catch anyone by surprise," she added.
Ford has announced a $30 billion investment in electric vehicle production in a bid to position itself to lead the United States' shift away from climate-damaging fossil fuels.
The company said it will build four new plants to produce electric vehicles and batteries that will create 11,000 new jobs by 2025, and Caldwell noted it will debut a new, cheaper electric pickup model in the coming months, the F150 Lightning.
Start-ups like Faraday and Fisker are also developing their own electric SUVs.
But considering the soaring success that is the Elon Musk-helmed Tesla, Caldwell conceded that traders can justify their enthusiasm for the latest electric vehicle maker on Wall Street.
"All the investors kind of want to be a part of the next company that could show as much value as Tesla and some people think that Rivian is that company," she said.
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