Some good reading below on Rivian's IPO possibilities.
The Rivian IPO is coming to the market. The electric vehicle unicorn filed confidentially in August and the paperwork is public. Let's look at the S-1...
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The idea of a Rivian IPO excites investors. The electric vehicle (EV) market is growing and they want a piece of the action.
For decades, scientists and politicians having been using the phrase “climate change.” And with that idea comes the need for eco-friendly solutions like future EVs. While Tesla is the leading electric automaker, the younger and less-known Rivian is making waves. The company recently revealed new vehicles. Now, investors are wondering if a Rivian IPO will follow.
The company hasn’t yet manufactured its vehicles for retail. Still, Rivian is turning heads. Big-name investors are putting money toward the project. And when someone like Jeff Bezos invests, people want to know why.
If Rivian decides to go public, investors should be ready. Here’s what we know so far…
Robert “RJ” Scaringe founded Rivian in 2009. The company develops vehicles, products and services for sustainable transportation. Although Rivian is an American company based in Michigan, it also operates in the U.K. and British Columbia.
It’s taken Rivian nearly a decade to introduce its two vehicles. It wasn’t until 2018 the world got a glimpse at the Los Angeles Auto Show. And just recently customers were able to preorder.
But despite the long waiting period, Rivian has an exciting mission:
And it’s not just the “possible” the company is challenging. Analysts have referred to Rivian as the “Tesla killer.” It’s rapidly moving in on Tesla’s EV market, and the company has some big names to back it up.
However, investors should ask…
Can Rivian Catch Up to Tesla?
Elon Musk’s
Tesla has led the charge to EVs. The company has sent promises of more eco-friendly cars for years. So it’s no surprise the company’s stock recently hit an all-time high.
Tesla is expanding across the globe. It recently got a new factory in China up and running in less than a year. And not only did the company have an impressive time frame, the Chinese government is fully backing Tesla’s operations. In a push to green vehicles, China’s government offers subsidies and exemption from the 10% purchase tax.
But Rivian is making strides in taking Tesla head-on. And it has major support.
In 2019, Rivian raked in $2.8 billion from investors…
- $350 million from Cox Automotive
- $500 million from Ford
- $700 million from Amazon
- $1.3 billion from funding round led by T. Rowe Price
Not only did Jeff Bezos invest in Rivian, he’s already hired the company. After visiting the facilities and getting an exclusive look, Bezos ordered 100,000 delivery vans designed for Amazon. The first vans are expected to hit the road in 2021. Bezos hopes to have all 100,000 by 2024.
As shown above, big-name investors are getting in on Rivian. That demonstrates the demand for EV companies. It also shows that a Rivian IPO could be successful. But can the company be more successful than Tesla?
Rivian IPO vs. Tesla IPO
Back in 2010. Tesla debuted on the public market. The company released 13.3 million shares of common stock for $17 apiece. The Tesla IPO raised $226 million for the company.
However, Tesla had already released products. Its first car was the Roadster in 2008. It had enough power to travel 224 miles when fully charged.
That’s why analysts speculate a Rivian IPO will come in the next few years. Rivian revealed its two EVs in November of 2018. And with the recent preorders, the company plans to get the vehicles out within the year.
The two vehicles are the R1T pickup truck and the R1S SUV. Both EVs share some great characteristics…
- Up to 400 miles or more per charge
- From 0 to 60 in three seconds
- Quad-motor system
- Wading depth over three feet
- Up to 750 HP
- Max towing capability of 11,000 and 7,700 lbs., respectively
Compared with Tesla’s truck, Rivian has kept a more traditional design. On the other hand, there’s a large price gap between the two companies. Tesla’s truck has a target price of $50,000 whereas Rivian’s starts at $69,000.
But Rivian does have one advantage: it can learn from Tesla’s mistakes. One example is Tesla’s post-sales service. Tesla’s cars are expensive to maintain, comparable with BMW. Scaringe mentioned that Rivian is “spending a huge amount of time solving service.” Post-sales service is an important part of car ownership. It could be the difference in keeping customers in the future.
So in summary…
When Will Rivian IPO?
If Rivian goes public in the next few years, an IPO will likely be successful. But if it waits too long, Tesla may dominate too much of the market.
Analysts are eyeing Rivian because of its potential. It’s a company with almost $3 billion to spend from some of tech’s biggest names. That kind of support could cause a shift in the EV industry. Rivian needs to challenge Tesla at the right time, and investors are looking forward to it.
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Investors won’t know if an IPO will be successful until after the launch of Rivian’s EVs. But if the product is everything the company claims, then investors should keep an eye out for a Rivian IPO.