From the largest U.S. initial public offering of 2021 to a miss on deliveries and the retirement of a senior manager, Rivian’s short drive as a public company was unsettling. At $ 83 a share, it is trading above its IPO price, but half of the November high.
It is unlikely that shaky stock movements will pay off in the near term. It is not easy to establish a value on a company that is part of an industry-transforming revolution but is at such an early stage. Tesla’s move to profitability gave the whole electric vehicle manufacturing sector a boost. But Rivian has only just begun to do vehicle deliveries. It reported revenue of only $ 1 million last quarter and is expected to remain loss-making for at least the next four years.
The good news is that the latest developments have not completely put the company off course. Chief Executive Officer Rod Coates’ retirement should have been more clearly marked for investors, but it has been moved to promote continuity. The production manure was also small. Rivian produced 1,015 vehicles last year instead of the planned 1,200. The deficit is not enough to prove that it will fail its target of 1 million vehicles per year by 2030.
What matters more is the scale of demand and the company’s ability to increase production while competitors, including Ford and GM, rush to do the same. The demand is high. Pre-orders for R1T and R1S models increased from 55,400 to 71,000 in two months. Even news that Amazon, an investor in the company, EVs will buy from Stellantis, does not mean Rivian has lost a customer. Amazon still plans to buy 100,000 Rivian vehicles in the next four years.
As companies and countries try to comply with emission restrictions, the demand for EVs should continue to rise. Mizuho analysts estimate that by 2030, EVs will make up 45 percent of global new car sales. With an additional $ 13.7 billion from the IPO and plans to begin construction on a new plant in Georgia that can produce 400,000 vehicles a year, Rivian is still on track.