The next Tesla? Rivian passes US$100 billion with few sales

Rivian Automotive Inc. reached a market value of over US$100 billion two days after its initial public offering, drawing comparisons to Tesla Inc.

But there are stark differences: When Tesla went public in 2010, the Elon Musk-led firm disclosed US$93 million in revenue and losses far below the US$1 billion Rivian reported for the first half. What's more, Tesla's initial market capitalization was about US$2 billion and didn't reach US$90 billion until 2020.

Eleven years later, Rivian is the world's fifth-largest automaker by market cap having delivered only a few electric vehicles to customers. After gaining 29 per cent in their first day of trading, Rivian shares soared as much as 24 per cent Thursday, vaulting its valuation past General Motors Co. It closed at US$122.99, up 22.1 per cent for a market value of US$120.5 billion.

“Along with the IPO of Lucid (LCID) the race to be the `next Tesla' is well underway and increasingly happening in public markets,” Ben Laidler, etoro global market strategist, wrote in a note.

“Rivian's valuation makes it a legitimate option for institutional investors who have previously only had Tesla to play the electric-vehicle space,” Nicholas Colas, co-founder of Datatrek Research, wrote in a note. Colas said some investors cycle through new firms as they go public, selling the “'old' name and replacing it with the `new.'”

For the Rivian believers, the backing of Amazon.com Inc. and Ford Motor Co. makes the company a compelling buy. “Investors reacted with excitement to its backing from Amazon and its R1T pickup truck, which has earned rave reviews since its recent launch,” said AJ Bell investment director Russ Mould.