Rivian’s IPO is expected in the coming days, as the EV startup is seeking a valuation of up to $65 billion. The EV startup has applied to trade under the symbol RIVN on the Nasdaq.
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The company plans to offer 135 million shares at $72-74 a share, up from prior plans of $57-$62. The automaker is expected to raise more than $9.8 billion when it sells 135 million shares.
By comparison, EV leader Tesla (TSLA) now has a $1.19 trillion valuation, with the stock price exploding over the last several weeks.
Among other U.S. automakers vying for EV market share, General Motors (GM) has a market valuation of $86.42 billion, and Ford (F) $79.8 billion as of Nov. 8.
Lucid Motors (LCID), which came public earlier this year via a SPAC merger, has a market cap of around $74 billion.
Rivian EV Pickup
The Amazon (AMZN)- and Ford-backed Rivian’s R1T beat Tesla and General Motors to the punch, as the EV market for electric trucks heats up. Rivian says limited R1T pickup deliveries began in September, with its R1S SUV due out by year-end.
The R1T electric pickup starts at around $67,500, before the $7,500 federal tax credit. The seven-seat R1S SUV goes for about $70,000. The preorder launch editions of the two vehicles sold out at the end of 2020.
Rivian Electric Delivery Van
But Rivian is said to be prioritizing production of electric vans for Amazon. Amazon has ordered 100,000 of Rivian’s electric vans. And while Rivian’s R1T pickup has grabbed headlines recently, Amazon’s vans are more likely to be revenue drivers in the near term. That’s why Rivian is reportedly focused on producing hundreds of vans for Amazon this year, while pickup production is nominal.
Amazon revealed in a filing on Oct. 28 that it had a roughly 20% stake in Rivian.
However, Rivian recently updated its website to say it will begin taking orders for its electric delivery vans in 2022 and will deliver them to fleet customers in early 2023, even though it has an exclusive deal to supply Amazon with electric vans for at least four years.
Rivian said in an SEC filing that Amazon would have exclusive rights to the delivery van for four years after the initial delivery date. After that period, Amazon would have the right of first refusal for two years over other customers that wanted to buy Rivian vans.
Rivian IPO
Rivian has raised $11.15 billion in private capital so far, according to PitchBook. In addition to Amazon’s stake, Ford has about a 14% interest in Rivian, although it recently exited from its board of directors.
Among the top funds, T. Rowe Price has a 19% stake. Founder and CEO RJ Scaringe controls about 11% of shareholder voting power.
The Rivian IPO is well-timed as the company is one of the few EV startups that is actually producing and delivering vehicles.
LCID stock has nearly doubled in the past few weeks as deliveries of the Lucid Air luxury sedan began.
The Rivian IPO will be sure to get lots of attention. But investors should be cautious about being among the first to buy RIVN stock. With new issues, investors should wait for initial price discovery and see how things shake out over several days or weeks. Look to see if Rivian stock can form an IPO base.
Production Ramp-Up
Rivian expects to deliver 20,000 vehicles in 2021. It projects doubling that figure for 2022.
In its S-1 filing, Rivian said it had 48,390 preorders for its R1T pickup and R1S SUV in North America as of Sept. 30. Preorders require a $1,000 refundable deposit.
The Rivian R1T is the first electric pickup to market, but others are not far behind.
“Several traditional automakers and EV new entrants have announced plans to launch EV pickups in the 2021 through 2024 time frame,” Goldman Sachs told clients in April.
GM plans to begin deliveries of its high-end EV Hummer later this year. General Motors will follow up with a Silverado EV as well as a GMC electric pickup for 2023. Ford’s first electric pickup, the F-150 Lightning, is coming in spring 2022. It has a targeted range of 300 miles vs. the Rivian’s truck’s 314-mile range per charge.
Rivian IPO: Financials
Rivian has yet to post a profit, as it is in the early stages of car production. Until the company scales output, losses are to be expected.
It had net losses of $426 million and $1 billion for 2019 and 2020, respectively. Rivian reported a loss of nearly $1 billion for the first half of the year.
On Oct. 22, it released preliminary results for Q3, which ended Sept. 30. It expects to post a record quarterly net loss of up to $1.28 billion. The operating loss for the quarter is expected to be $725 million to $775 million.
“The negative gross profit relates primarily to significant labor and overhead costs for our manufacturing facility in Normal, Ill., reflecting our factory’s large-scale capabilities,” the company said in an SEC filing. “(H)owever, as we just started to ramp vehicle production at the site, the facility produced limited quantities of vehicles in the period.”
Auto, EV Stocks
Tesla stock fell 5% in Monday’s trading, but was near session highs. CEO Elon Musk signaled over the weekend that he will sell 10% of his huge TSLA holdings.
LCID stock popped 10% to an eight-month high.
Ford stock leapt 4.5%, continuing a powerful run since late September and especially since earnings late last month.
GM stock rose nearly 1.9% to 59.60, moving above a 59.45 buy point. But its relative strength line has lagged that of many other auto stocks.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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