In anticipation of a possible initial public offering this year, electric car maker Rivian said it expects to be valued at more than $50 billion, with a potential market capitalization of $100 billion at the end of its first day of trading. That figure would place Rivian’s market value ahead of Tesla, Lux Research says.
The venture capital-backed company built three vehicles to show off its ideas for a concept car designed to compete with Tesla’s Model S and Model X, Rivian announced on Tuesday. The vehicle they showed off was the Roadster that company’s CEO, RJ Scaringe, debuted in 2010 and that Tesla also used as a basis for a Roadster variant. The three other concepts in the company’s pipeline of plans were the XR electric sport utility vehicle, Inspiration for a future electric crossover and Rivian’s “ultimate crossover.”
“There are the Magna, the PSA … then you have a Ferrarri that’s got the Spyder, and then you have a Porsche Turbo S … and then you have a [the Audi] Quattro,” Scaringe said, in a conversation with the Times ahead of Rivian’s announcement. “Then you have a Mercedes S-Class and a BMW 5 Series … I wanted to create the polar opposite of all of those.”
Tesla’s plans to revolutionize the auto industry have been criticized and ridiculed from both sides of the aisle, with critics pointing to Tesla’s significant debt — it has never turned a profit and has yet to turn an annual profit — and to the company’s lack of experience in manufacturing cars. Tesla is nonetheless expected to have a market cap of over $100 billion at the end of this year.
Rivian, as of now, is only looking at putting its vehicles into production as early as 2019, according to Scaringe. Scaringe wouldn’t say how much Rivian raised in capital during their private funding, but said the company has about $450 million in equity, as well as a fund to continue to fund its innovation efforts.
Rivian also sent out press releases announcing that they have secured two deals with prospective customers: a partnership with Volkswagen North America, and a joint venture with Volkswagen’s passenger car division to create a small passenger car that Rivian will manufacture in Volkswagen’s new manufacturing plant in Brazil.
Before Rivian, Scaringe previously founded Vessence, a start-up that called itself the first publicly funded hybrid electric vehicle company. He also spent years developing business jets.
Read the full story on The New York Times.
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