Rivian Automotive, LLC *Still a private company*
Rivian is a privately held automotive company specializing in the development of electric vehicles, products, and services related to environmentally sustainable transportation. The company has chosen a different path to the EV market, catering their vehicles to the side of market that has yet to be touched by larger EV producers such as Tesla (TSLA), Nio Inc (NIO), and Nikola Corporation (NKLA). I am of course talking about the Electric Utility Vehicle Market which has yet to see a consumer model made widely available to the masses.
Rivian has remained relatively under the radar since its founding in 2009 by CEO R.J. Scaring, until 2017 when the company announced that it would be building an electric SUV, called “Electric Adventure Vehicles” and pickup truck. From there, the company has continued to move forward, unveiling their SUV and pickup truck at the LA Auto Show in 2018. The vehicles were designated the R1S and R1T, respectively, with the claim that the vehicle’s physical platform can be modified for future vehicles or adapted by other companies. Current capabilities also allow the vehicle to be semi-autonomous for both on-road and off-road driving.
Since this announcement, the company has received a slew of capital investments, with the most recent and largest investment from T. Rowe Price Associates, Inc. The investment management firm injected $2.65 billion in funds to Rivian from investors such as Soros Fund Management LLC, Coatue, Fidelity Management and Research Company, and Baron Capital Group. This round of investments is a follow up to a very active 2019 for the company as Rivian acquired $2.85 billion in funds during fiscal year 2020. In addition, major global technology and automotive companies such as Amazon ($AMZN) who invested $700 million, a $500 million investment from Ford ($F), $350 million investment by Cox Automotive, and the rest of the FY2020 funds coming from BlackRock.
Even better news for those who are looking to invest in this company once it goes public is the plans the company has for 2021 and beyond. In addition to Amazon's initial investment of $700 million, they also collaborated with Rivian to create a new electric delivery vehicle to help the tech giant reach its goal of zero net carbon emissions by 2040. In doing so, 100,000 of these electric delivery vehicles were ordered by Amazon with plans to have this deal be fulfilled as they have installed thousands of charging stations at delivery hubs in North America and Europe. Amazon and Rivian plan to have all 100,000 of the vehicles on the road by 2022 which is projected to be on track as the vehicle has gone from sketch, to design, to customer delivery in a little over a year.
This is a huge step for the electric vehicle automaker as it has proven that the company is able to carry its own weight, being able to stay on track and fulfill amazon’s order even through COVID-19, which naturally has caused some issues for the company. Rivian was forced to stop work at its factory, delaying the R1T and R1S projects and a collaboration with Ford which has been placed on hold since. Although the company has encountered multiple setbacks, all three of the company’s products, the R1T, R1S and the Amazon Vans, are still projected to come to the market in 2021, with plans to have the company’s vehicles available to the general market by the end of 2021.
Surprisingly, with all the company has undergone in the past few years, sources indicate that the electric vehicle company is now valued at an impressive $27.6 billion before it has even produced a single car to the public. When comparing this to the $39 billion market cap of Ford Motor Co, one can get an idea of how much potential this company could achieve.
I personally believe that this company will be a strong buy when it IPO’s for many reasons. To start, they are developing their electric adventure vehicles specifically to target a portion of the market that consumers have yet to see EV’s, which is the electric utility vehicle market consisting of electric SUV’s and electric pickup trucks. The company has also amassed a fortune from multiple investors totaling close to $10 billion, including the contract to develop 100,000 electric delivery vans for Amazon ($AMZN). With such a large valuation even before their vehicles are introduced to the market later this year, I see no reason for the company to flop post-IPO. In fact, when the company does go public, projected end of this year of sometime in 2022, I feel that there will be nowhere for the stock price to go except up as I believe that this is the Tesla ($TSLA) of the electric adventure vehicle market.
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