If the recent hype around Tesla is any guide, one should not be surprised that the largest initial public offering of 2021 comes from an electric vehicle startup that has barely delivered any cars.
On Wednesday, electric vehicle startup Rivian debuted on Nasdaq. Stock opened at $106.75 per share, a nearly 30 percent jump above its IPO price. At the end of its first trading day, Rivian was valued at $88 billion, making it the largest IPO globally this year and the sixth largest in U.S. history, according to Bloomberg.
Rivian’s valuation was modified a few times ahead of the IPO. Target price range was initially set at $57 to $62 per share and then raised to $72 to $74. The company sold 153 million shares through the public offering, raising $11.9 billion in fresh capital.
Stock continued surging on Thursday and closed at $122.99 per share. The startup is now worth more than Ford and General Motors. However, like many electric vehicle startups that have gone public in the past two years, Rivian has yet to deliver any major orders. A few months ago, Rivian began shipping its first EV model, a pickup truck called R1T, mostly to its own employees.
R1T was featured in a Blue Origin promotional video in April, in which Jeff Bezos was seen driving the truck across Blue Origin’s test facility in the desert of west Texas to examine a New Shepard space capsule that had just landed. Rivian is partially owned by Bezos’ Amazon and has a contract to build 100,000 delivery vans for the e-commerce giant by 2030.
This year, the company plans to make only 1,200 vehicles at its plant in Normal, Illinois. The goal is to ramp up annual production to 150,000 vehicles by late 2023.
That’s an ambitious target even with Rivian’s funding status as automakers globally are facing a semiconductor shortage and other supply chain challenges that don’t seem to be easing anytime soon. The company’s founder and CEO R.J. Scaringe said in a Bloomberg TV interview Wednesday that Rivian’s biggest challenge at the moment is the “health of the supply chain,” particularly parts shortages.
“For us, it’s a question of how do we, as rapidly as possible, transition ourselves away from a fossil-fuel based economy?” Scaringe said of the company’s mission. “That of course has a huge focus on the transportation products. But it also includes energy products. And this is something that we will certainly get into as we really try to accelerate that.”