Rivian hasn’t delivered many of its intriguing new electric pickup trucks, but on its second day as a public company saw a 22% spike in its share price that turned the relatively small, but heavily funded upstart, into the second-most valuable U.S. automaker, trailing only Elon Musk’s Tesla.
Shares of the Irvine, California-based company jumped by $22.26 to close at $122.99 in Nasdaq trading on Thursday. That boosted its market cap to $120.5 billion, surpassing General Motors at $89.8 billion and investor Ford at $78.1 billion, companies that each sell millions of cars and trucks worldwide, operate dozens of factories and employ hundreds of thousands of people. Only Tesla, which also still just sells a fraction of the number of vehicles that GM and Ford do, has a higher market value at $1.07 trillion as of the market close.
Rivian’s IPO, the biggest for a U.S. company since Facebook’s 2012 IPO, raised about $12 billion in additional capital for a company that had already distinguished itself as the best-funded electric vehicle startup in the country, having amassed about $11 billion from investors including Amazon, Ford, Cox Automotive and T. Rowe Price through July 2021. It plans to use those funds to add more production capacity to be able to build 1 million electric vehicles annually by the end of the decade, including its R1T pickup and R1S SUV for consumers, and delivery vans for Amazon and other commercial customers.
Company founder and CEO RJ Scaringe, attributed investor excitement over its IPO to Rivian’s dual track consumer and commercial vehicle strategy.
“The products that will open the brand umbrella are our R1T and R1S. They\’re going into a segment that hasn\’t seen this level of innovation, this level of technology,” Scaringe said in a Bloomberg TV interview. Those vehicles are also built using a common, flexible platform that makes it relatively easy to also do commercial vehicles.
“We’ve vertically integrated the electronics in the vehicle, we vertically integrated the software stack, we built a propulsion platform that\’s incredibly scalable. And a lot of that vertical integration on that platform has allowed us to go really fast on building out the commercial side of our business,” he said.
The surge in Rivian’s share price also boosted Scaringe’s net worth to at least $1 billion with today’s close.
Coincidentally, Rivian’s surge coincides with a drop in Tesla shares this week that began after Musk said he would be selling 10% of his stake, motivated in part by taxes he has to pay on options.
Tesla fell 0.4% to $1,063 in Nasdaq trading on Thursday and has dropped 13% since closing at an all-time high of $1,229.01 on Nov. 4.