Nascent electric vehicle makers have been going public fairly regularly since the start of 2020 and the latest, and perhaps strongest, is Rivian. The battery-electric truck maker, which already has an impressive bankroll, believes it could be worth as much as $80 billion.
Yup. That’s $80 billion with a one massive “B” at the front.
For reference, it’s more than General Motors is worth, but only by a little at $72.3 billion. Ford is a bit further off the pace at $51.5 billion. Toyota, a legacy automaker whose faith in EVs is less assured, comes in at about $280.4 billion.
And the biggest of them all, is of course, fellow EV maker Tesla boasts a market cap of $772.1 billion. Many industry observers believe if any company is ready to topple Tesla from its perch, it’s Rivian. Meanwhile, it seems likely that CEO R.J. Scaringe and the current slate of investors, led by Amazon, but also features T. Rowe Price and Ford, would be happy to be half the company Tesla is, at least using this number.
Can it happen?
Tesla currently trades in $720-per-share range. This is after the company’s 5-for-1 split that occurred almost exactly one year ago today. At the time it was trading just above $2,000 a share at the time, although some of that was due to the announcement of split.
However, getting to $80 billion is already going to be an ambitious target. Rivian wants to do its IPO around Thanksgiving this year. To hit the bullseye, potential investors will need to feel very confident in the company.
That could be slightly problematic as it’s already pushed back its production launch twice, although those were COVID pandemic-related delays, causing supply-chain disruptions. Naturally, like all EVs, the R1T pickup and R1S sport-utility vehicle need plenty of semiconductors and those are in short supply.
That said, Rivian is reportedly going to kick off production of its pickup on a limited scale at the company’s plant, a former Mitsubishi facility, in Normal, Illinois.
The company is also expected to produce 100,000 battery-electric delivery vans for … Amazon. The vehicle, which the online retail giant helped to develop, is currently undergoing real world testing. There is no finite time frame for when it will begin production. However, Rivian is already hunting for a place to build a second factory, which may suggest the time is getting very close.
How are the others faring?
To get that that $80 billion valuation, it may be compared to other newly public EV makers. One of the companies it will compete against in the marketplace is Fisker Inc., which went through the SPAC process to go public. Currently it’s market cap is about $4.1 billion with shares training the $13-$14 range lately. Not quite $80 billion, but still a very good number since it’s got to overcome Tesla as well as GM, Ford and every other legacy maker throwing billions into to its electric vehicle development plans.
Perhaps joining Rivian as the “most likely to …” among new EV makers is Lucid Motors. It too used a blank-check company to go public earlier this year and its current market cap comes in at about $33.4 billion. It enjoyed a pretty good run early in the year getting as high as $64.86 a share. For much of the last two months its hovered between $20 and $30 a share.
Using these numbers, one can make an educated guess at what it takes to get to an $80 billion market cap. Lucid’s best 52-week stock price is $64.86 and because it has 1.62 billion shares outstanding, it — at one point — crested a market cap of $100 million.
So it can be done, but as quickly as Lucid hit that number, it went away, eventually falling to its current range. However, Rivian’s recent filing is confidential, but reportedly it hasn’t yet determined how many shares will be offered or what price they will be offered at, but if they want to offer 1.6 billion shares at about $60 a share … that would hit the $80 billion target.
The company is working on the IPO with advisers including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley.