Rivian, Electric Vehicle Start-Up, Unveils Large Losses in I.P.O. Filing
Rivian, an electric truck maker backed by Amazon and Ford Motor, pulled back the curtain on its operations on Friday as it headed into one of the most anticipated initial public offerings of the year.
In documents filed as part of the I.P.O. process, Rivian revealed large losses and provided new details on its business.
The company is one of many 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, makes an upscale truck and a sport utility vehicle, both designed to be driven off-road. “Now, there’s a way to explore our beautiful planet responsibly,” the company proclaims on its website. It also has a contract to make delivery vans for Amazon, which has made a big investment in the company.
Rivian is considered to be better run and have better prospects than some of the electric vehicle companies that have already started trading on the public market. Nikola and Lordstown Motors have stumbled badly. And Rivian’s supporters are hoping that its truck and S.U.V. will have enough allure to be popular even in the face of competition from Tesla.
Still, becoming a force in the electric vehicle market is a costly business.
Like other electric vehicle companies coming onto the stock market, Rivian is reporting big losses because it has huge costs from setting up and running production lines and because it has no sales. In the first half of the year, the company had a loss of $994 million, compared with a $377 million loss in the same period last year, according to the I.P.O. filing. Tesla, the leading electric- carmaker, had a loss of $56 million in 2009 before going public in the middle of 2010. It wasn’t until 2020 that Tesla made its first annual profit.
Rivian, which has over $10 billion in investments from Amazon, Ford Motor and several Wall Street funds, did not say how much money it expected to raise in the offering. That number typically comes in later filings.
During its often rocky ascent, Tesla had production problems that put great strain on its finances. Tesla’s chief executive, Elon Musk, also made missteps that got Tesla into regulatory trouble and created other controversies. But the company appears to have won the backing of investors — its $777 billion value on the stock market is 10 times that of General Motors.
Rivian’s founder and chief executive, R.J. Scaringe, a studious engineer with a Ph.D. from M.I.T., has kept a relatively low profile and has avoided overselling what the company can do, industry experts say.
Rivian had said it expects to start delivering its truck, the R1T, in September and its S.U.V., the R1S, later this year. The cheapest model of the truck costs $67,500 and the S.U.V. $70,000. In the filing, the company said that, as of Sept. 30, it had roughly 48,390 orders for its truck and S.U.V. 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 coming into the market to challenge Tesla. Earlier this year, Ford Motor began selling an electric sport utility vehicle, the Mustang Mach-E, while Volkswagen rolled out an electric S.U.V. of its own, the ID.4. Ford is poised to add an electric version of its popular F-150 pickup truck next year. The F-150 is a work truck and would not compete directly with Rivian’s truck, which is marketed more as a leisure vehicle.
Another company, Lucid Motors, headed by a former Tesla executive, Peter Rawlinson, is close to starting deliveries of a luxury sedan, the Lucid Air, that is capable of traveling up to 520 miles on a single charge of its battery pack, about 100 miles farther than the longest-range model from Tesla. 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.
More E.V.s are set to follow. General Motors is preparing to start selling the battery-powered GMC Hummer and Cadillac Lyriq S.U.V.s, and it is also working on an electric pickup truck of its own. Mercedes-Benz, BMW, Hyundai and other automakers are also adding new E.V.s to the fray.
Success for Rivian could be a lasting boost to the economy around the company’s main production facility in Normal, Ill. The company employs 2,500 workers there, and expects to eventually double the head count.
By doing a traditional I.P.O., Rivian has chosen a different route onto the stock market than Lucid, Nikola and Lordstown, which all became public companies by merging with a special purpose acquisition company, or SPAC, that was already on the stock market. Many SPACs have been set up since the start of last year, but critics say the deals offer small investors fewer protections than a traditional I.P.O.