Rivian, a promising and well-funded maker of electric trucks, said Friday that it plans to sell shares through an IPO but disclosed few additional details.
The company, which has raised more than $ 10 billion from investors like Amazon and Ford Motor, is building an electric pickup truck and sports utility vehicle at a former Mitsubishi plant in Illinois. Its founder, RJ Scaringe, told customers last month that he expected the truck to be delivered in September and the SUV to follow soon after. The company also develops delivery vans for Amazon.
Auto analysts consider Rivian to be one of the most profitable startups for electric vehicles in what is expected to be a highly competitive market. In addition to Tesla, the dominant manufacturer of electric cars, major automakers such as General Motors, Volkswagen and Ford plan to bring dozens of electric cars and trucks to market in the coming years.
“It’s an EV juggernaut – it has a pedigree of Amazon, Ford, and a who’s who of funders,” said Dan Ives, managing director of equity research at Wedbush Securities. “Investors have been waiting for the day a Rivian would go public.”
When the company’s electric pickup hits the market in September, it will beat GMC’s electric Hummer pickup, expected by the end of the year, and Ford’s electric F-150 Lightning. The gas-powered F-150 has long been America’s best-selling vehicle, and the electric version could instantly become a force in the electric vehicle market upon its debut, most likely in the spring.
Rivian also plans to expand a network of charging stations and service centers, said Mr Scaringe, a doctorate engineer. from the Massachusetts Institute of Technology, in the July email to customers.
The company may be entering a crowded field, but it’s taking a different approach than Tesla, the pioneer most people think of when they think of electric cars. Tesla has had great success selling sporty sedans, but it hasn’t yet focused heavily on pickup trucks and off-road vehicles – lucrative segments of the auto industry. Rivian has focused on making “adventure” vehicles that it says are made for trails and dirt roads.
The switch to electric cars
“Rivian is one of the best positioned electric vehicle startups,” said Asad Hussain, senior mobility analyst at PitchBook, via email. “The company’s focus on the relatively untapped market for premium electric trucks should enable rapid market acceptance.”
The leaders of Rivian and Tesla are also very different. Tesla’s CEO Elon Musk was a sassy and combative force in the automotive industry who made great promises and engaged in public feuds with individuals and government agencies. Mr Scaringe is an understatement and has been measured in his public statements and promises.
Still, both executives are immersed in the details of their business. Mr Musk said he slept at his company’s main facility in Fremont, California at key moments after Tesla ramped up production. Mr. Scaringe is also frequently present at Rivian’s Normal, Illinois factory, and workers there refer to the color of robots and safety leashes that direct the flow of people as “RJ Blue”. He is known for considering vehicle colors, including one known as “Launch Green”.
That year, a California judge allowed Tesla to bring a lawsuit alleging that Rivian stole intellectual property through hiring employees. Rivian said the lawsuit was unfounded and intended to hurt a rapidly growing competitor.
Although Rivian has existed in some form since 2009, over the past decade it has faced frequent skepticism about a product that appeared aloof and speculative, Scaringe said in a June interview.
“At the beginning, on day 1, year 1, the risk of starting such a company is enormous and the probability of success is very low,” he said. “That’s just true. And I had to accept that. “
But Mr Scaringe said he remained confident about his team and about the strategic plan they had put in place: First, raise enough money to develop core technologies – software, battery architecture, mechanical systems – that make vehicles for both consumer and commercial customers Customers could support; then raise more capital to mass-produce trucks and vans.
Rivian seemed to have started this second phase a few years ago. In the fall of 2018, Amazon founder Jeff Bezos flew to Michigan to meet Mr. Scaringe and view the company’s vehicles. By the end of next year, Rivian had raised nearly $ 3 billion from investors like Ford and Amazon, who also ordered 100,000 vans.
“We knew that we had to build some strategic partners that would allow us to scale into different segments and, above all, to conquer this side of the fleet,” said Scaringe. “Amazon saw many benefits in the way we approached both business building and the opportunity to work together.”
When Mr Bezos flew into space aboard a rocket built by his Blue Origin company last month, he and the rest of his crew drove to the launch pad in a Rivian vehicle.
Other great supporters of Rivian include BlackRock, Fidelity, and T. Rowe Price.
The company’s decision to go public is noteworthy for another reason. According to Dealogic, a research firm, more than two dozen companies that make electric vehicles, batteries, and chargers have gone public or are planning to partner with specialized acquisition companies or SPACs.
Doing business with SPACs is considered a quick route to public markets, while an IPO is a more rigorous process that tends to take longer and involves greater scrutiny. In recent months, some investors and regulators have questioned the bullish statements made by the creators of SPACs and the companies they have acquired, including a handful of electric vehicle companies.
By filing confidential filing with the Securities and Exchange Commission for an IPO, Rivian and its existing investors retain far more control and ownership of their business than they would if they did a SPAC deal. The sponsors of these acquisition companies typically take a large chunk of a company’s ownership in compensation for going public quickly.
