Electric Truck Startup Rivian Plans to Raise up to $8 Billion in its Upcoming IPO

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【Summary】On Wednesday, Reuters​ reported that electric truck startup Rivian is aiming to raise between $5 billion and $8 billion with its upcoming IPO later this year. The company is seeking a valuation of about $80 billion in the listing, which would make it more valuable than U.S. automakers Ford Motor Co and General Motors.

FutureCar Staff    Oct 22, 2021 11:50 AM PT
Electric Truck Startup Rivian Plans to Raise up to $8 Billion in its Upcoming IPO
The Rivian R1T electric pickup may lure buyers away from gas-powered trucks from Ford and GM.

Electric truck maker Rivian is one of the most talked about EV startups since Tesla. The company's first customer bound vehicle rolled off the production line Tuesday at its factory in Normal, Illinois, on Tuesday morning, marking Rivian's official entrance in the truck market that's currently dominated by gas-powered models from Ford and General Motors and Ram.

Now that the first electric R1T pickup truck has rolled off the assembly line, the company is looking ahead to its pending IPO later this year, which is shaping up to be one of the biggest Wall Street debuts in recent years. 

On Wednesday, Reuters reported that Rivian is aiming to raise between $5 billion and $8 billion with its IPO later this year, according to people familiar with the matter. Rivian is seeking a massie valuation of about $80 billion in the listing, the sources said. The $80 billion figure would make Rivian more valuable than Ford, which has a market cap of $51 billion, and General Motors, with a $75 billion market cap.

Rivian declined to comment on its upcoming IPO plans.

Although Rivian has refrained from sharing the details of its plans, the company is expected to reveal its finances for the first time in a public filing in the coming weeks, according to Reuters.

California-based Rivian is one of the most well-funded startups. It has raised over $10 billion from investors since 2019. Other investors include BlackRock Inc, Soros Fund Management, Fidelity and Saudi auto distributor Abdul Latif Jameel Co (ALJ). The company is also backed by e-commerce giant Amazon, Ford Motor Co and T. Rowe Price

Amazon ordered 100,000 electric delivery vans from Rivian to add to its e-commerce delivery fleet. The fully electric vans are being custom built to meet Amazon's unique needs. The first Rivian-built Amazon vans are already on the roads in California delivering packages.

But Rivian has the potential to disrupt the consumer truck market in the U.S. with its electric R1T pickup and soon to be released R1S companion SUV. The two vehicles are designed to be rugged and are capable of handling off-road driving or highway cruising.

Both models will be built on Rivian's "skateboard architecture", which contains all of the vehicle's batteries and electrical components. The skateboard design can accommodate different body styles for more efficient manufacturing, according to Rivian.

If Rivian manages to raise $8 billion, which is looking more likely as investors pour money into electric vehicle companies and related stocks, the company will have one of the biggest IPO since Facebook went public in 2012.

The $8 billion goal would also rank Rivian as the fourth biggest IPO of the past decade in the U.S. Only three other companies have raised more than $8 billion in IPOs since 2011, including $25 billion by Chinese e-commerce giant Alibaba, Facebook, which raised $16 billion in 2012, and ride-hailing company Uber, which raised $8.1 billion in 2019.


The Rivian R1S electric SUV.

Rivian has another advantage over rivals as it owns a factory to build its vehicles. Rivian purchased a shuttered Mitsubishi plant in Normal Illinois in 2016 and the plant was retooled to produce electric vehicles.

The company recently said it's in talks with multiple locations to build a second U.S. EV factory. According to documents reviewed by Reuters, Rivian's investment in a second factory will be at least $5 billion. Proceeds from Rivian's upcoming IPO will help fund construction of Rivian's new U.S. factory. 

However, even though Rivian has secured billions in funding, the EV startup still faces an uphill battle to lure buyers away from gas-powered trucks and SUVs from Ford and GM and Ram. 

Ford has dominated the pickup truck segment for over 40 consecutive years with its F-Series pickup, which means that new competitors like Rivian will compete for market share, especially with Ford's upcoming fully electric F-150 Lightning pickup due next spring and the Hummer EV from GM's truck division GMC.

But Rivian says its state-of-the-art electric powertrain technology gives the R1T pickup a competitive advantage over Ford's gas-powered F-150.

But owning a former auto factory and a lucrative contract with Amazon for electric delivery vans gives Rivian a big advantage in the fully-electric commercial vehicle market.

Rivian also plans to launch the "Rivian Adventure Network", which is a set of fast-charging stations throughout the country. These stations will be able to add 140 miles of range to a Rivian vehicle in just 20 minutes. 

Since Rivian is marketing its truck and SUV as outdoor adventure vehicles, many of the chargers will be located near national parks and other popular outdoor recreation areas.

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