With Rivian’s IPO filing announced, investors are asking themselves, could this be the next Tesla (NASDAQ: TSLA)? With pandemic-induced delays, the company has finally started delivering on orders as of September 2021 and is now looking to ramp up production.
What does Rivian do?
Rivian is an EV pickup manufacturer founded in 2009 by Robert Scaringe. Scaringe is the current CEO and among supporters is referred to as the ‘Clarke Kent’ to match Elon Musk’s ‘Tony Stark’ comparison.
Rivian has two flagship products, the R1T (in production) and the R1S (production beginning Q4 2021) along with electric delivery vans. Rivian received early investment from Amazon (NASDAQ: AMZN), which still retains a 5% stake in the company as well as a 100,000 electric delivery van order, to be fulfilled by 2030.
But that’s not all the whole business. Rivian is building out an ecosystem of interconnected products and services, ranging from insurance and software to membership benefits.:
How much do Rivian’s pickups cost?
Rivian is operating a mid to high-end pricing model, starting from $67,500 for the R1T and $70,000 (have to scroll down past the SPECs but there’s the Launch Edition, Adventure Package, and then the cheapest option at $70,000, the Explore package R1S). Preorders are $1,000 for both vehicles.
Rivian Financial also allows buyers to pay a down payment if they choose to, and then they can pay the balance in installments through a 48-month, 60-month, 72-month, or 84-month scheme subject to an interest rate dependent on the buyer’s term and credit score. This should encourage more customers to gravitate towards its ‘more affordable options.
When is Rivian going public?
The IPO has been filed but an exact date and ticker symbol have not yet been announced. Keep an eye on our blog as we’ll be sure to keep you updated, or download our app where we’ll have a deep dive on Rivian post-IPO.
What about Rivian’s financials?
Well, that’s the problem. There is no revenue, yet. Rivian only started making deliveries in September so we are yet to see any sales on its financial statements. As it stands, the S-1 shows a loss of $994 million, with $683 million going towards research and development and $307 billion going towards selling, general, and administrative expenses for the 6 months ended June 30, 2021. The company is in growth mode, so investors will have to pay more for the anticipated success over the next number of years.
What is Rivian’s growth potential?
According to experts, the pickup truck industry is the U.S.’s most prominent and profitable industry. For electric pickup trucks, Rivian will be the first to market. The first-mover advantage will give it a leg up against its competitors. Rivian also has a specific target market in mind — the environmentally conscious and adventure-seeking consumer.
But there is serious competition. The Tesla Cybertruck and Ford F150 lightning are both set to debut in 2022, with GM following the pack in 2023, so it will be a tough market. For some quick figures, we already mentioned Rivian has 48,390 orders in the U.S. and Canada as of 30 September 2021. Tesla, in comparison, has over 250,000 orders as of November 2020, with some sources estimating that this figure could now be over 1,000,000 orders. After Ford announced its electric pickup, it had more than 44,000 reservations in 48 hours.
Rivian’s biggest issue will be scaling production. It is investing heavily in building out its charging network along with planning for factories to produce for higher volume orders but it has a long way to go. The main legacy competitors, Ford & GM, don’t have this problem. EV disruptor Tesla has also shown strength in production, so expect Rivian to have no shortage of challenges in the coming months and years. For more insights on EV manufacturers and disruptors, be sure to get your 7-day free access to MyWallSt here.
Financial Writer at MyWallSt
David's favorite stock is Google. He's a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.