Late last week, Rivian applied for an initial public offering. The 12-year-old electric vehicle maker, which is backed by Amazon and considered one of the biggest threats to Tesla, is seeking a higher valuation of $80 billion. That would make Rivian one of the world’s most valuable automakers, worth billions more than Ford or GM — and its trucks aren’t even on the road yet. Rivian’s first vehicle, the $73,000 pickup, is expected to begin shipping in September, and a second model, a $75,500 seven-seat SUV, is to be released next year.
In some ways, Rivian’s timing is good. President Joe Biden recently issued an executive order calling for electric vehicles to account for half of all new auto sales in the United States by 2030, and a growing number of legacy automakers will ramp up their production over the next two decades. Committed to move to electric vehicles. .
But as the world grapples with the pandemic, Rivian is facing some serious challenges. Semiconductors shortages have delayed and halted production in the auto industry. There also aren’t that many charging stations available across the US, leaving some potential EV buyers worried about running out of juice.
“It’s a great thing that more public infrastructure is available,” Jeremy Michalek, an engineering and public policy professor at Carnegie Mellon, told Recode. “Probably the first priority is making sure there are enough fast chargers available at highway rest stops so you can take your vehicle wherever you want.”
Like Tesla, Rivian is selling home chargers and developing a nationwide charging network. The company plans to have 10,000 stations available by the end of 2023, many of which will be in remote areas. As has Tesla, Rivian is taking an AI-centric approach to its vehicles. Rivian has invested heavily in its hands-free, semi-autonomous driving technology with a suite of features called Driver+, which sounds like Tesla’s Autopilot. In a lawsuit, Tesla also accused Rivian of stealing trade secrets from its former employees after they were hired.
But one major difference between Rivian and Tesla is what types of electric vehicles the two companies are selling. Founded in 2009 and kept secret for years, Rivian announced in 2018 that its first model would be a pickup truck and an SUV for off-road driving. This is a notable difference from Tesla, which has focused primarily on selling cars and crossovers. (Tesla announced its first pickup truck, the Cybertruck, in 2019, but deliveries have been delayed until 2022.)
Rivian is also attracting commercial clients, including its influential backers. After participating in two funding rounds for the startup, Amazon last year committed to buy 100,000 electric delivery vehicles from Rivian by 2030. Former Amazon CEO Jeff Bezos and three other passengers boarded the Rivian SUV with humans on Blue Origin’s maiden flight to the launch site.
Ford, which has its plans to release an electric version of its popular F-150 pickup truck next year, has also invested more than half a billion dollars in the electric car startup.
Tough times for Rivian’s IPO
There’s no doubt that President Biden is excited about electric vehicles. The Biden administration has already begun electrifying the entire federal fleet of cars, SUVs and trucks, more than 600,000 vehicles. Meanwhile, Democrats in the White House and Congress are pushing to buy 165,000 electric delivery trucks for the Postal Service. Biden wants to allocate $174 billion to manufacture 500,000 electric vehicle chargers nationwide. (Tesla CEO Elon Musk has also promised to open up Tesla Superchargers for electric vehicles from other manufacturers.)
But while EVs are becoming more popular globally, the US is facing slower growth than China or Europe. Global electric vehicle sales grew 41 percent last year, according to the International Energy Agency, an intergovernmental energy policy advisory organization. While sales of electric vehicles in the US lag behind those of China and Europe, sales of hybrid cars are on the rise, a sign that more consumers may warm to electric vehicles down the line.
In a recent Pew survey, some 7 percent of Americans said they have an electric or hybrid vehicle, and 39 percent said they would consider buying one. The high price of EVs is certainly a contributing factor to the slow adoption rate in the US. But the price of batteries, which are the most expensive part of electric vehicles, is falling, so Americans may see cheaper electric vehicles in the future.
The constraints of the pandemic era have plagued the auto industry as well. Rivian, which was originally supposed to release its pickup truck in July, twice postponed deliveries of the vehicles. Late last month, Rvian founder and CEO RJ Scaring told customers who already owned vehicles that COVID-19 has affected “everything from facility manufacturing, equipment installation, vehicle component supply (particularly semiconductors)”. had intervened.” The lack of the same chip forced Tesla to rewrite the code for its vehicles, and experts are concerned that a lack of semiconductors could delay production of the new electric Ford F-150.
Still, if Tesla’s runaway success is any indication, Rivian stands to find eager, outside customers who want an EV that can be off-road. Keeping in mind the current challenges, the company is emphasizing on the growing number of legacy automakers wanting to stand apart from Tesla and a piece of the EV market. It is expected that Jeep will release an electric version of its Wrangler by 2023. President Biden has already given a test drive.