Despite Rivian’s blockbuster IPO, Elon Musk has warned that the “real test” for the electric vehicle maker and Tesla competitor’s success will be to achieve high production and balanced cash flow.
“There have been hundreds of automotive startups, both electric and internal combustion, but Tesla is [the] only American automaker to have high volume production and positive cash flow in the past 100 years, “Musk tweeted.
A Rivian representative did not immediately respond to FOX Business’ request for comment on Musk’s tweet.
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Backed by Amazon and favored by Jeff Bezos, Rivian raised approximately $ 11.9 billion on its IPO after selling 153 million shares at $ 78 each. In addition, the company has given underwriters a 30-day option to purchase up to 22.95 million additional shares at the IPO price.
After the first two days of trading, Rivian is valued at more than $ 100 billion, above the market value of automotive giants General Motors and Ford Motor Company. Amazon holds a 22.4% stake in Rivian while Ford holds a 14.4% stake. Shares are up about 3% at the time of writing on Friday.
| ticker | safety | Last | Change | Change % |
|---|---|---|---|---|
| RIVN | RIVIAN AUTOMOTIVE INC. | 129.95 | +6.96 | + 5.66% |
Although Rivian has approximately 55,400 pre-orders for its R1T pickup and R1S SUV and has reached an agreement with Amazon for 100,000 electric delivery vans by 2030, the company has not yet generated any significant revenue. Rivian said in his amended IPO prospectus that it will lose up to $ 1.28 billion in the third quarter and that its revenue will be between $ 0 and $ 1 million.
Rivian began production and shipping of the R1T in September, which starts at $ 67,500 and has an EPA estimated range of 314 miles on a single charge. As of October 31, Rivian was producing 180 R1Ts and shipping 156 R1Ts. Starting at $ 70,000 and having an EPA estimated range of 316 miles on a single charge, the R1S is expected to begin shipping in December after the ongoing vehicle validation and testing is complete.
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The company expects to produce around 1,200 R1T and 25 R1S and ship around 1,000 R1T and 15 R1S by the end of 2021. In addition, Rivian expects its pre-orders to be fulfilled by the end of 2023. Meanwhile, the company expects to produce and deliver 10 electric delivery vans in 2021.
Rivian’s Normal, Illinois facility is currently equipped to produce up to 150,000 vehicles per year. Rivian aims to produce approximately 1,310 R1 vehicles and 1,710 commercial vehicles per week, which equates to 65,000 R1 vehicles and 85,000 commercial vehicles, including computers, annually.
“We assume that by the end of 2023 we will achieve a vehicle production rate that would result in us using 100% of the facility’s currently installed capacity of up to 150,000 vehicles by the end of 2023,” wrote Rivian on the file. “In addition, we believe that we can increase the Normal Factory’s annual production capacity to up to 200,000 vehicles in 2023 by introducing additional R1 platform variants and expanding the facility. In the next few years we expect the establishment of further “domestic production capacities in order to support our roadmap for product development and to meet the demand expected in the future.”
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This isn’t the first time Musk has taken a slap against the competition.
In August, Muska tweeted “I don’t mean to be unreasonable, but maybe they should deliver at least one vehicle per billion dollar valuation * before * going public?” in response to reports that Rivian’s IPO would put the company at approximately $ 80 billion. He also tweeted laughing emojis in response to a report that Rivian is developing a level 3 autonomous driving system with hands-free functionality, similar to Tesla’s full self-driving feature.
In October, Musk also responded to a report that the R1T production rate has stalled with just over one electric truck per day. tweet “Prototypes are trivial compared to scaling production and supply chain.”
“When these are resolved, achieving a positive gross margin is the next nightmare,” he added. “If you start a second new line of vehicles before the first works, the resources will be divided and the probability of failure increased.”
In addition to Musk’s Twitter jabs, Tesla previously filed a lawsuit against Rivian accusing the company of stealing employees and trade secrets.
