Rivian Automotive Inc. signaled it’s ready for Wall Street with a confidential IPO filing in late August, a move that could make the Irvine electric vehicle startup Orange County’s most valuable public company within a few months.
Rivian, which is set to release its first consumer vehicle in the coming weeks, about a week ago filed a confidential draft registration statement for a proposed public offering with the Securities & Exchange Commission.
No additional details were provided, although a closer look at the company’s finances is expected in the coming weeks once an SEC review of the filing is completed.
The information will offer for the first time a greater glimpse on the inner workings and financials of the Amazon-backed company started by Laguna Beach resident RJ Scaringe.
With the registration statement, the vehicle maker’s internal valuation has now reportedly climbed to about $80 billion, after raising some $10.5 billion to date from investors such as Amazon’s Climate Pledge Fund, Ford Motor Co., BlackRock and T. Rowe Price Associates Inc.
Such a lofty valuation would eclipse the largest automaker by U.S. sales so far this year, General Motors Co. (NYSE: GM), which had a recent market cap of $71.4 billion.
Locally, OC’s largest publicly traded company is Irvine heart valve maker Edwards Lifesciences Corp. (NYSE: EW). It had a recent market cap of $74 billion and its valuation is up by more than 30% over the past year.
Achieving Scale
Scale is crucial for any startup looking to nab market share. Rivian is entering a competitive landscape for electric vehicles comprised of both buzzy startups and heritage automakers, notes Orange County Automobile Dealers Association Executive Director John Sackrison.
“I think it will be challenging to gain consumer attention and market share as the majority of automakers now have electric vehicles in their lineup, are launching more and already have brand awareness,” Sackrison said.
Tesla Inc. (Nasdaq: TSLA), notably, is ranked third in new vehicle registrations for the first seven months of the year in OC, after Toyota and Honda.
The Palo Alto electric vehicle brand has sold 8,570 units so far this year in OC alone, up about 62% year-over-year, according to OCADA’s outlook report. That’s good for an 8.5% share of the local market.
Rivian’s been rapidly building out its footprint in OC and elsewhere.
Locally, the company leases more than 300,000 square feet of space for its operations, according to Business Journal records.
The company acquired the historic Laguna Beach South Coast Cinemas in May for $10.7 million and is set to recast the space into one of the company’s showroom experiences. More recently, Rivian filed plans to open a 32,000-square-foot service center on Briggs Avenue in Costa Mesa, just off the 55 freeway, marking its first such location in OC and one of the handful of spots in the country.
The automaker also has service centers planned in El Segundo, San Francisco, Brooklyn, Bellevue and Normal, Ill., where its first manufacturing plant is located. A second plant costing $5 billion or so is in the works, with Texas and Arizona among the areas being considered for the site.
The chip shortage hampering much of the automotive industry caused the company to push back deliveries of its initial vehicle for consumers, the R1T truck, which was originally set to begin deliveries in July.
Those initial deliveries are now expected this month.
Rivian’s second vehicle, the R1S SUV, is now expected to begin deliveries sometime in the fall.
Despite the delays, Rivian has been able to deliver on its electric delivery vans, which it’s contracted by Amazon to make 100,000 units for the e-commerce behemoth. Some of the vans began hitting the road for deliveries earlier this year.
The Competition
The vans are a major point of distinction Rivian can lay claim to against its nearest direct EV competitor Tesla, which had a recent market cap of about $725 billion, making it far and away the most valuable automotive company in the world.
Co-founder and CEO Elon Musk has said Tesla would eventually produce delivery vans, once a solution to making the required battery cell is found. With last-mile delivery solutions all the talk to accommodate the continued growth of e-commerce, electric delivery vans are a hot commodity.
Last October in a call with investors, Musk confirmed he believed the future landscape would include other car companies, and reiterated Tesla’s dominance, citing its vertical manufacturing process.
“What other car companies do, even in the auto segment is quite a small subset of what Tesla is,” Musk said. “We’re designing and building so much more of the car than other OEMs [original equipment manufacturers] who will largely go to the traditional supply base, and I call it catalog engineering. It’s not very adventurous and it basically ends up like older products [that] end up looking the same because they’re going to the same suppliers. So, I mean, to the degree that you inherit legacy components, you inherit the legacy limitations and cost structure.”
Added Musk, “We’re maybe 10% in common with other car companies.”
Musk’s confidence level didn’t stop Tesla from filing a lawsuit against Rivian and some former employees last July. The lawsuit alleged Rivian poached former Tesla employees to obtain trade secrets and counted at the time of the complaint’s filing 178 former Tesla employees in its ranks, according to court documents.
Rivian denied the allegations, while alleging the lawsuit aimed “to slow Rivian’s momentum and attempt to damage Rivian’s brand.”
