Electric vehicles: Rivian, electric vehicle startup, reveals significant losses in IPO filing

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Rivian, an electric truck maker backed by Amazon and Ford Motor, lifted the curtain on its operations on Friday as it headed for one of the most anticipated initial public offerings of the year.

In documents filed as part of the IPO process, Rivian disclosed significant losses and provided new details about its business.

The company is one of many companies hoping to capture a share of the electric vehicle market, which is expected to grow exponentially over the next two decades.

Rivian, founded in 2009, manufactures a premium truck and sport utility vehicle, both designed to be driven off-road. “Now there is a way to responsibly explore our beautiful planet,” the company proclaims on its website. He also has a contract to make delivery vans for Amazon, which has made a big investment in the business.

Rivian is considered better run and has better prospects than some of the EV companies that have already started trading in the public market. Nikola and Lordstown Motors stumbled badly. And Rivian’s supporters are hoping his truck and SUV will have enough appeal to be popular even in the face of competition from Tesla.

Yet becoming a force in the electric vehicle market is a costly business.

Like other electric vehicle companies going public, Rivian reports big losses because it has huge costs for setting up and operating production lines and because it has no sales. In the first half, the company recorded a loss of $ 994 million, compared to a loss of $ 377 million in the same period last year, according to the IPO filing. Tesla, the leading electric car maker, suffered a loss of $ 56 million in 2009 before going public in mid-2010. It wasn’t until 2020 that Tesla made its first annual profit.

Rivian, who owns more than $ 10 billion in investments from Amazon, Ford Motor and several Wall Street funds, did not say how much money he expected to raise in the offer. This number usually comes in subsequent filings.

During its often eventful rise, Tesla experienced production issues that strained its finances. Tesla CEO Elon Musk also made some missteps that caused Tesla to have regulatory problems and created other controversies. But the company appears to have won the backing of investors – its $ 777 billion stock market value is 10 times that of General Motors.

Rivian founder and CEO RJ Scaringe, a studious engineer with a doctorate from the Massachusetts Institute of Technology, has kept a relatively low profile and has avoided overselling what the company can do, industry experts say. .

Rivian had said he planned to start delivering his truck, the R1T, in September and his SUV, the R1S, later this year. The cheapest model of the truck costs $ 67,500 and the SUV $ 70,000. In the filing, the company said as of Thursday it had approximately 48,390 orders for its truck and SUV in the United States and Canada from customers who each paid a cancelable and refundable deposit of $ 1. $ 000.

The Rivian models are part of a wave of electric vehicles entering the market to challenge Tesla. Earlier this year, Ford Motor began selling an electric SUV, the Mustang Mach-E, while Volkswagen launched its own electric SUV, the ID.4. Ford is set to add an electric version of its popular F-150 pickup truck next year. The F-150 is a work truck and would not directly compete with Rivian’s truck, which is marketed more as a recreational vehicle.

Another company, Lucid Motors, run by former Tesla executive Peter Rawlinson, is set to begin deliveries of a luxury sedan, the Lucid Air, capable of traveling up to 520 miles on a single charge of its battery, about 100 miles farther than Tesla’s longest model. Like Tesla’s Model S and Model X, the Air is aimed at wealthy buyers, costing $ 169,000 before federal and state incentives.

Lucid is valued at nearly $ 40 billion on the stock market.

Other electric vehicles are expected to follow. General Motors is preparing to start selling battery-powered GMC Hummer and Cadillac Lyriq SUVs, and is also working on its own electric pickup truck. Mercedes-Benz, BMW, Hyundai and other automakers are also adding new electric vehicles to the fray.

Rivian’s success could be a lasting boost to the economy around the company’s main production facility in Normal, Illinois. The company employs 2,500 people there and hopes to eventually double its workforce.

In going through a traditional IPO, Rivian chose a different IPO route than Lucid, Nikola and Lordstown, all of which became public companies by merging with a Special Purpose Acquisition Company, or SPAC. , which was already on the stock market. Numerous PSPCs have been in place since the start of last year, but critics say the deals offer smaller investors less protection than a traditional IPO.


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