Rivian revs up for $65bn valuation in IPO

Rivian, Electric, Auto, Cars, Electric Cars, E1, Amazon, Bezos

IMAGE CREDIT: Patrick T. Fallon / AFP / Getty

Electric car maker Rivian, backed by Jeff Bezos, is aiming for a $ 65 billion market value.

Rivian announced late Tuesday that its shares would trade at $ 78 each, well above the lower end of its original target of $ 52 per share. It sold 153 million shares, more than the 135 million originally targeted.

The increased asking price means Rivian will raise $ 11.9 billion, which is in the top 10 all-time IPOs in the US according to data from Dealogic.

More than 20 investment banks are involved in the execution of the sale, led by Morgan Stanley, Goldman Sachs and JP Morgan.

The rise in price reflects the huge demand for stocks of electric car makers on the day a number of automakers and countries pledged to move away from fossil fuels by 2040 or earlier at the Cop26 climate change conference in Glasgow.

The increased interest has catapulted Tesla, the electric car pioneer, into the ranks of the trillion-dollar public companies in the world. A valuation of USD 65 billion would roughly equate Rivian with BMW.

Bezos drove to the launch pad of his spacecraft in one of Rivian’s prototype electric SUVs in July, practically promoting the automaker.

Amazon owns 22% of Rivian’s shares and is committed to buying 100,000 electric delivery vehicles from the start-up by 2025. Rivian can only sell vans to Amazon for four years.

Rivian’s debut product, the R1, will be available in pickup or SUV variants and will compete with Tesla’s Model X and electric SUVs from older manufacturers such as Ford and Audi, as well as newer entrants such as Fisker and Canoo from the USA or NIO from China.

Rivian will manufacture the R1 and utility vehicles at a factory in Normal, Illinois. However, Irvine, California is home to the construction and design of the automobile, including important work on propulsion and battery technology.

According to Chris McNally, an automotive analyst with investment bank Evercore ISI, the company could generate revenues between $ 20 billion and $ 25 billion by 2025 if it meets its target of 350,000 vehicles produced annually at the plant.