Electric truck maker Rivian, backed by Amazon, goes public

SILVER SPRING, Md. — Shares in Rivian Automotive are soaring on their first day of trading, rising 37%. It’s an auspicious stock market debut for the electric vehicle maker, which has the backing of Ford and Amazon. The opening trade of $106.75 gives Rivian a market value of about $91 billion, greater than that of Ford and General Motors. The company said it will use the proceeds from the IPO to ramp up production of its trucks, vans and SUVs. Rivian just recently sold its first electric pickup trucks. Rivian is the latest in what’s becoming a long line of companies trying to carve out some of Tesla’s dominant market share in electric vehicles.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Shares in Rivian Automotive are set to trade publicly Wednesday, and the world should get a better idea of just how excited investors are about the electric vehicle market.

Ahead of the start of trading, Rivian shares priced at $78, which gives the company an estimated market value of $66.5 billion. It’s a noteworthy figure, given that Rivian has so far delivered about 150 of its electric pickup trucks to customers, mostly employees, and lost $1 billion in the first six months of this year. The valuation is up there with established automakers such as Honda ($53 billion) and Ford ($80 billion), which sell millions of cars worldwide each year.

Rivian has some high-profile corporate backers: Ford held a 13% stake in Rivian coming into the offering and Amazon had a 20% stake.

Automakers big and small, new and old, are chasing Tesla, which has largely dominated the electric vehicle market for years, amassing a market value of more than $1 trillion along the way. So far this year, Tesla has sold around 627,300 vehicles.

Craig Irwin, an analyst who covers electric vehicle and EV charging companies for Roth Capital, says that even with more companies entering the EV market, there is still plenty of room for newcomers.

“EVs are inevitable, and it’s a good thing for the markets to have another credible EV competitor come public,” Roth said. “Rivian’s IPO marks a point of incremental maturation for the industry and shows that billions in capital is available for credible players.”

Rivian could raise as much as $12 billion with the sale of 153 million shares, which would top the $8 billion Uber raised in its IPO in 2019. Rivian said it will use the money to ramp up production of its trucks, vans and SUVs. It’s the latest in what’s becoming a long line of companies trying to carve out some of Tesla’s dominant market share.

Rivian has a contract with Amazon to build 100,000 electric delivery vans at its factory, a former Mitsubishi plant in Normal, Illinois. Ford Motor Co. invested a half-billion dollars into Rivian in 2019 and said the companies would work jointly to develop electric vehicles.

As of Oct. 31, Rivian had about 55,400 vehicle preorders in the U.S. and Canada. Those orders are placed with a $1,000 deposit that can be canceled and refunded.

Rivian rolled out its first vehicle, the R1T electric truck in September and will launch its electric SUV, the R1S, in December. Prices for the truck start at $67,500, while the SUV base package starts at $75,500 and gets even steeper with all the add-ons.

Options for the vehicles include a $10,000 battery upgrade that will extend the driving range from 314 miles (505 kilometers) to more than 400 miles (643 kilometers). A three-person roof-mounted tent adds $2,650 to the bill and an off-road recovery kit will cost an additional $600.

The company said it aims to produce about 1,200 R1Ts and 25 R1Ss and deliver around 1,000 R1Ts and 15 R1Ss by the end of 2021.

The R1T will compete with Ford’s F-150 Lightning electric pickup, which goes on sale next year. The Lightning has a starting price of $40,000, but will sell for thousands of dollars more once customers add options. General Motors has announced plans for an electric version of the Silverado pickup.

“Although the R1T’s advantage is that it’s first to market and it will likely appeal to a Tesla-type shopper, the long-term volume expectations for a $70,000+ midsize truck aren’t very high,” said Jessica Caldwell of the automotive website Edmunds in an email.

The research firm LMC Automotive says in 2020, EVs made up a little more than 3% of the global auto market and less than 2% of the U.S. auto market. The group projects those numbers to shoot up to about 15% and 12%, respectively, by 2025.

Rivian, which was founded in 2009, says it lost $426 million in 2019 and $1 billion last year. It reported losing nearly another billion dollars in the first six months of this year. Tesla, which went public in 2010, recorded its first annual profit last year.