Just as Tesla runs into confusion generated by its at times deluded chair and biggest shareholder Elon Musk, investors have flocked to a new rival due to list on Wall Street.
Tesla shares fell 11.99% on Tuesday after a near 5% slide on Monday, wiping billions from the value of the shares and Musk’s holding in the electric vehicle (EV) maker.
The catalyst for the sell-off was Musk’s public musing last weekend about whether he should sell 10% of his Tesla shares. He posed the question to followers on social media, and asked for a vote and they voted yes.
That saw the selloff in Tesla shares which accelerated Tuesday amid more confusion about what Musk will do.
But that hasn’t impacted the appetite among American investors for EV companies, as the pricing of the impending float (IPO) of electric vehicle maker, Rivian Automotive shows.
Late Tuesday night in the US, Rivian’s IPO was priced at $US78 a share – well short of Tesla’s $US1,027 a share but a sign that the rivals are emerging to Musk’s company.
The listing will raise $US11.9 billion for Rivian’s ambitious new EV plans, which are dominated by deals with major shareholder Amazon. That’s on top of the $US11.14 billion raised in a series of funding rounds that Amazon and Ford contributed to.
Last week, Rivian increased the expected price range to between $US72 and $US74 from a previous range of $US57 to $62.
At the $US78 issue price, Rivian is worth $US68 billion – almost as much as Ford ($US79 billion) and GM ($85 billion). Like all tech newbies, that’s a lot of money for a lot of promise but no delivery – yet.
Rivian though has a lot of credibility – major shareholders are Amazon and Ford.
Rivian isays it has a backlog of 55,400 pre-orders for its R1T and R1S electric vehicles. The R1T is a truck that starts at $US67,500, and the R1S is a Sports Utility Vehicle starting at $US70,000.
The company said it expects to fill those orders by the end next year.
Amazon has ordered 100,000 vehicles to be delivered by Rivian by 2030, and the companies plan to have 10,000 new Rivian-Amazon delivery vehicles on the road as early as next year as the giant pushes its fleet to renewable energy power.
Rivian said in its float documents that it will lose up to $US1.28 billion in the third quarter, while revenue will range from zero to $US1 million.
It will join other EV companies on Wall Street – stocks such as Lucid motors – worth $US72 billion. Nikola, which floated to much cheering last year was worth more than Ford at one stage but it was attacked by short sellers and now has a market cap of $US6 billion.
While Rivian is still effectively pre-revenue, the company said in its prospectus that it has a backlog of 55,400 pre-orders for its R1T and R1S electric vehicles. The R1T is a truck that starts at $67,500, and the R1S is an SUV starting at $70,000, according to Rivian’s website.
Rivian says its factory in Illinois has the capacity to produce up to 150,000 vehicles a year. The company had over 6,000 employees as of the end of June.
