The company, which is backed by Amazon and Ford, is seeking to sell shares in one of the biggest initial public offerings of the year.
Rivian, an electric truck maker backed by Amazon and Ford Motor, on Friday revealed huge losses and a voracious need for cash as it headed into one of the most anticipated initial public offerings of the year.
In filings to the Securities and Exchange Commission, Rivian said that it had lost $2 billion since the start of last year, underscoring the costs and risks of developing electric vehicles. And the company said it expected to spend roughly $8 billion on facilities and equipment through the end of 2023. Amazon, which has a contract to buy 100,000 delivery vehicles from Rivian, has invested over $1.8 billion in the company, according to the filing.
Rivian is one of many start-ups hoping to capture a share of the electric vehicle market, which is expected to grow exponentially over the next two decades. They are chasing Tesla, which, though it went through many precarious years, has become the most valuable automaker in the world by far.
Rivian, founded in 2009, makes an upscale pickup truck and a sport utility vehicle, both designed to be driven off-road. “Keep the world adventurous forever,” the company proclaims in its I.P.O. filing.
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 take market share from Tesla.
Still, becoming a force in the electric vehicle market is an incredibly expensive business.
Like other electric vehicle companies, Rivian has big losses because it costs a lot to set up and run production lines and because it has minimal sales. In the first half of the year, the company lost $994 million, compared with a $377 million loss in the same period last year, according to the I.P.O. filing. In 2020, it lost $1.02 billion.
“We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity and ramp up operations,” Rivian said in the filing, “and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”
Tesla, the leading electric carmaker, lost $56 million in 2009 before going public in the middle of 2010. It wasn’t until 2020 that Tesla made its first full-year profit.
The Rivian filing did not say how much money it expected to raise in the offering. That number typically comes in later filings.
Investors keep a close eye on how much cash young, fast-growing companies are consuming, in case they run out. Rivian’s operations used up $850 million in the first half of this year, roughly the same amount as in all of last year. It said it had $3.7 billion of cash in hand at the end of June, which includes money it raised when it issued $2.7 billion worth of preferred stock in January. It also borrowed $2.5 billion through “convertible promissory notes” in July.
Rivian has over $10 billion in investments from Amazon, Ford Motor and several Wall Street firms. The filing said Amazon had plowed $1.35 billion into Rivian through stock investments and $490 million by purchasing the notes sold in July. Ford’s investments total $1.24 billion. T. Rowe Price, the mutual fund company, has invested $2.6 billion.
The filing did not say what percentage of Rivian’s stock those investors own.
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 the company 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. His compensation was $1.3 million last year, according to the filing. But his pay this year could be much larger, provided Rivian’s stock performs well. In January, Rivian’s board granted Mr. Scaringe 6,785,315 shares and a performance-based option to purchase up to 20,355,946 shares.
Rivian said in the filing that it started delivering its truck, the R1T, in September, but it did not say how many vehicles it delivered in the month and a company representative declined to provide a number. Rivian plans to start delivering 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 had paid a 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, and 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, has said it will soon start delivering 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 electric vehicles are set to follow. G.M. is preparing to start selling a battery-powered GMC Hummer pickup truck and the Cadillac Lyriq S.U.V. 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. Rivian’s work force totaled 6,274 employees at the end of June, up from 2,185 a year earlier.
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.
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Rivian, an Electric Vehicle Start-Up, Reveals Large Losses in its I.P.O. Filing - The New York Times
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