Rivian creates the largest IPO in the history of electric vehicles. Is Tesla's rival coming?

Rivian (RIVN), known as one of Tesla's favorable competitors, finally landed in the capital market. On November 10, U.S. Eastern time, the electric car manufacturer invested by Amazon and Ford Motor was listed on Nasdaq. Its IPO price was $78 per share. The price was much higher than the price range after the increase. The scale of the issuance was 153 million shares, raising more than ten billion U.S. dollars. It is worth mentioning that this fundraising made Rivian the largest US stock IPO during the year and the largest IPO in the history of electric vehicles.
Rivian's stock price opened about 37% higher on the first day of the IPO, reporting $106.75 per share. The stock's intraday gains once expanded to more than 50%, with a market value of over US$90 billion, surpassing General Motors (GM) and Ford Motor (F). As of the close of trading on November 10, Eastern Time, Rivian's stock price was reported at US$100.73 per share, an increase of 29.14% and a market value of US$85.9 billion.

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In addition to Rivian, Lucid (LCID), also known as Tesla's favorable competitor, has also attracted much attention from the capital market recently. As Lucid began to deliver vehicles, its stock price also "increased." At one point, its stock price soared by nearly 60% in a week, and its single-day market value soared by US$13.7 billion. As of the close of trading on November 10, Eastern Time, Lucid's market value has risen by US$13.353 billion since entering November.
Targeting the high-end electric truck market
Rivian is known as the "darling" of the American technology circle. At present, Rivian has completed at least 8 rounds of financing, and completed 4 rounds in 2019 alone. Looking back on Rivian's financing process, its investors include Amazon, Ford Motor, BlackRock and other well-known companies and institutions, among which investors such as Amazon and BlackRock have even participated in it many times.
Before the IPO, Rivian increased the previous offering price range of US$57 to US$62 to US$72 to US$74. After the roadshow, large Wall Street IPO investors believed that Rivian "may become the next important company in the electric car industry dominated by Tesla."
Asad Hussain, senior mobile analyst at PitchBook, said: “Rivian is one of the most advantageous electric vehicle start-ups. The company will focus on the relatively untapped high-end electric truck market, and it should be Let it quickly gain market acceptance."
In addition, the "Amazon effect" has also increased Rivian's attention to a certain extent. In addition to direct financial support, Amazon also signed a contract with Rivian. Rivian will produce no less than 100,000 electric trucks for Amazon delivery and transportation within 10 years, and 10,000 products will be delivered by the end of next year. .
Like Rivian, Lucid is also the "darling" of capital. It has set a record for the largest IPO fundraising in the global smart electric vehicle field. In May of this year, Lucid completed the listing through a merger with Churchill Capital IV (CCIV), raising US$4.4 billion.

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According to public information, Lucid was founded in 2007 by Bernard Tse, a former vice president and director of Tesla and Sam Weng, a former Oracle executive. The original name is Atieva, which specializes in the production of electric vehicles. It is understood that many of Lucid's engineers are from Tesla. Among Lucid's 12 executives, 6 have worked at Tesla.
It is worth mentioning that, because after the listing, Lucid has not delivered a vehicle, but has obtained a valuation of more than 20 billion U.S. dollars, which caused Tesla CEO Musk to post a satire on the social platform, alluding to Lucid and Rivian’s car-free delivery. But sitting on high valuations. It is understood that when Tesla went public in 2010, it was valued at US$1.7 billion and delivered 1,400 cars.
On October 30, Lucid announced the start of delivery of the first batch of new energy vehicles Lucid Air. The first batch is expected to be 520 Lucid Air Dream Edition models. In addition, it plans to deliver relatively low-priced Touring and Pure versions to customers in 2022. . On that day, Lucid's stock price soared 31.31%, with a market value of over US$57.4 billion.

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Although Rivian and Lucid are favored by the capital market, they still have a lot of challenges to compete with Tesla. New Constructs, an investment research company, believes that Rivian has not yet produced a large number of cars, and not only has to compete with the well-funded electric car upstart Tesla, but also with established car companies such as General Motors and BMW Group.
Faced with the challenge of the two new car-building forces, Rivian and Lucid, Musk also said on social media: "I recommend that their (Rivian) first factory is up and running. (Because) an affordable unit It is very difficult to achieve mass production at cost."
At present, Rivian has only one plant in Illinois, USA, with a planned annual production capacity of about 150,000 vehicles, which is far from being able to meet current order requirements. In order to expand production capacity, Rivian plans to spend no less than US$5 billion to build a second plant near Fort Worth, Texas, and reach a production capacity of 200,000 vehicles in 2027. Unlike the first factory, this factory will not only assemble vehicles but also produce batteries.
Lucid CEO Peter Rawlinson said that Lucid's next challenge after the delivery of vehicles is to increase factory output in order to increase sales. Lucid plans to produce about 575 electric vehicles by the end of 2021, and the output will increase to 20,000 in 2022. In addition, Rivian also recently revealed plans to build a second assembly plant in the United States in order to expand production capacity.
Some analysts say that the risk that Rivian and Lucid two new car-building forces cannot deliver in large quantities is revenue, and revenue corresponds to cash flow. Tyson Jominy, an analyst at J.D. Power, said: "In order to mass produce, they may need to seek more financing from investors to support the initial production input."
It is understood that Rivian has almost no revenue in terms of revenue. Rivian disclosed in its prospectus filed in October that it currently has no revenue, and its operating losses in 2019 and 2020 were US$409 million and US$1.021 million respectively; in the first half of 2021, the company’s operating losses were US$994 million, compared with the previous year. The operating loss during the same period was US$381 million.
Lucid expects that the current cash situation can maintain normal operations in 2022, but does not support it to produce more cars, raise additional funds to maintain operations in 2023 and beyond, or a high probability event. Data show that in the first half of this year, Lucid lost $3.6 billion, and the American research company CFRA believes it will be at a loss in 2024.
There are opinions that both Rivian and Lucid, the two new car-building forces, hope to replicate Tesla’s success. One of the key links is to expand production capacity, form a production scale to reduce costs, and drive sales. This process requires a lot of money. . To a certain extent, this may be the main reason why Rivian and Lucid have successively conducted IPOs.


Post time: Nov-13-2021