Not driving yet, but already overtaking – Hi-Tech – Kommersant

This week saw the IPO of Rivian, an electric car maker that began mass production just a couple of months ago but now costs more than most of the world’s auto giants.

Electric vehicle maker Rivian Automotive, a company that almost no one heard of a few years ago, went public on Wednesday on the NASDAQ. It ended up having the largest IPO of the year and the largest US IPO in nine years.

A week before the placement, due to the high interest of investors, the company had to increase the price corridor for shares, which were eventually sold at $ 78 during the placement. The company sold 153 million shares and raised $ 11.9 billion, and its total IPO value was estimated at $ 66.5 billion.

In the days following the IPO, shares of Rivian continued to rise – for example, on Friday they traded at $ 123 per share, which gave the company a market capitalization of $ 104.9 billion. So the company became more expensive than most automakers in the world.

And if the lack of profit with such a successful placement is a common thing (Uber or Tesla at the time of their placement were also extremely unprofitable), then the estimate of $ 100 billion with 150 cars produced is something out of the ordinary.

Rivian (originally Mainstream Motors) was established in 2009. It was founded by RJ Scaridge, then a 26-year-old engineer, a recent graduate of Rensselaer Polytechnic in Troy, New York, who also studied at the Massachusetts Institute of Technology. As he himself says, he has always loved cars.

As a child, he restored old Porsches with a neighbor, and from the age of 18 he knew that he would create a company in this area. In addition, he has always loved outdoor trips and off-road driving, and at the same time, he has long wanted a powerful SUV to be environmentally friendly. So the idea for Rivian was allegedly born.

In addition, as Mr. Scaridge admitted, he has long wanted to dispel the myths surrounding electric vehicles.

“There are a lot of fables here – a truck cannot be electric, an electric car cannot go off-road, it cannot get dirty in the mud, it cannot drag someone in tow, and truck and pickup truck buyers do not want something environmentally friendly. All this is fundamentally wrong. Electricity and technology can make a truck incredibly powerful and enjoyable to drive, ”said Mr. Scaridge in an interview.

And Rivian has already created several of these technologies. Among the developments of the company are advanced batteries, as well as a chassis made on the principle of a skateboard, which Rivian plans to sell to other companies.

Now the manufacturer of electric pickups and trucks is being compared to Tesla, noting the similarity of their popularity with investors. But at the beginning of the history of Rivian, she and Elon Musk’s company had much more in common: initially, Mr. Scaridge was still engaged in the creation of a sports electric car.

These developments continued until 2011, the company even had a prototype ready, and then RJ decided that he needed to switch to another car. According to Mr. Scaridge, he and his team then thought a lot about the future strategy of the company and came to the conclusion that it was necessary to change the focus and work on other types of electric vehicles.

“We wanted to create a brand that would combine performance, good road performance, off-road capability, functionality and continuous product improvement – a combination that simply wasn’t on the market,” he says.

Then the team began to work on the pickup and SUV. At one time, the development of an electric car went simply at RJ’s home in the suburbs of Detroit, and some of the team members even lived there. Mr. Scaridge himself recalls that then in the house they talked only about electric cars and nothing else – “at breakfast, lunch and dinner, 24/7.”

Soon, the company managed to attract the first small investments – as they say, from Saudi and Japanese investors. But in general, during the first ten years of its existence, little was known about the company.

Unlike many other start-ups that begin to assert themselves shortly after creation, Rivian has worked quite unnoticed for a long time – without loud statements and advertising campaigns.

This continued until approximately 2018–2019.

“If you’ve never heard of Rivian before – well, that’s intentional. Until recently, she worked in stealth mode, ”wrote then The New York Times.

However, Rivian attracted the interest of large investors earlier. At that time, corporations such as Apple, Ford and Amazon had already significantly invested in it. For example, Amazon invested $ 1.3 billion in it and before the IPO was its largest shareholder with a share of 22.4%.

Mr. Scaridge himself says that this time was needed for the high-quality alignment of all processes – from the development of technologies and design to the creation of a business plan and alignment of production processes. The media write that Mr. Scaridge scrupulously delves into all issues of development and production and practically lives in his offices and at the factory.

Time was spent on the selection of the team. It now includes experienced professionals such as Chief Engineer Mark Winnels, formerly at McLaren, or Vice President of Design Jeff Hammond, who previously worked at Jeep for many years.

The first prototypes of Rivian electric vehicles – the R1T pickup truck and the R1S SUV – were unveiled at the 2018 Los Angeles Auto Show. It is R1T and R1S that the company plans to sell in the near future.

The start of assembly of the first electric pickup R1T was announced two months ago, in September. The first deliveries of this car began in October. So far, almost all of the Rivian electric vehicles that came off the assembly line went to the employees of the company itself. R1S production is scheduled to begin shortly.

Rivian is headquartered in Plymouth, Michigan and has its main plant in Normal, Illinois, a former Mitsubishi plant. The company already employs over 10 thousand people. Management is looking for a site for a second plant.

Even now, the company – which is also different from Tesla – does not make grandiose predictions and does not make high-profile promises.

Rivian has received more than 55,000 orders for R1T and R1S, and the company says it is unlikely to complete all of them before 2023.

The company remains deeply unprofitable and does not promise financial breakthroughs anytime soon. Rivian’s loss for the first half amounted to almost $ 1 billion. By 2023, the company plans to spend another $ 8 billion, not assuming a profit in this period.

Another problem that remains is that it is not yet clear how well Rivian will be able to mass-produce and market its electric vehicles.

“Manufacturing is the biggest challenge. The need for capital is huge and ongoing, ”said Mike Ramsey, an analyst at Gartner. However, the funds raised for the IPO, as well as the sale of shares after the placement, can help the company in this.

According to some experts, despite the statements about electric trucks, Rivian has not yet presented a commercial truck itself.

“Rivian products are not really designed to work as a truck. Their goal is to be more of a part of a lifestyle suitable (for trucking.— “B”), but intended for recreation and entertainment, ”says IHS analyst Stephanie Brianley.

But Rivian is working with Amazon to create an electric truck that can be used commercially. Amazon has already ordered 100,000 electric trucks for it. The first 10 thousand are planned to be delivered next year.

Yana Rozhdestvenskaya

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