Shares in electric vehicle firm Rivian soared when they started trading on Wednesday, boosting the market value of the firm to $100bn (£74bn).
Rivian shares increased by 30% on the first day of trading.
As a result, the start-up, which is developing electric vans, pickup trucks, and SUVs, is now the second-most valuable carmaker in the United States, trailing only Tesla.
Rivian, on the other hand, only began delivering its first electric pick-up trucks to customers in September.
In addition, the California-based start-up has lost more than $2 billion in the last two years.
The van and truck manufacturer has piqued the interest of investors, in part because it already has the backing of online retailer Amazon.
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On Tuesday, it raised more than $11.9 billion from investors, who paid $78 per share, well above the firm’s target range.
The floatation is one of the top ten initial public offerings (IPOs) in US history.
Rivian is already being compared to Elon Musk’s Tesla, which revolutionised the electric vehicle market.
The company beat rivals such as Ford and General Motors to design and manufacture a pick-up truck, and it plans to launch a sports utility vehicle (SUV) in December and a delivery van in 2023.
It’s a popular market segment among Americans, but it’s thought to be difficult to decarbonize.
“Rivian exists to create products and services that help our planet transition to carbon neutral energy and transportation,” said RJ Scaringe, the company’s founder and CEO, in a filing with the Securities and Exchange Commission (SEC) prior to the share flotation.
“This is what inspired me to launch Rivian, and it drives every decision we make as a company.”
The company was founded in 2009 as Mainstream Motors, but in 2011 it changed its name to Rivian, which is derived from the Indian River.
Mr Scaringe initially pursued the concept of an electric sports car, but later shifted his focus to trucks and vans.
Rivian has recently invested heavily in the production of the R1T, which is designed as an aspirational, outdoor adventure vehicle. It has a three-person tent roof attachment and a slide-out kitchen unit for cooking in the wilderness.
However, the firm’s relationship with Amazon, which not only owns 20% of Rivian but has also stated that it will purchase 100,000 electric delivery vans from the company once it begins to roll them out, is critical to investors’ interest.
Not long ago, US investors were uninterested in electric vehicles. But things have changed – and in a big way!
When Tesla went public in 2009, its shares were priced at $17 each, giving the company a total market capitalization of $1.5 billion.
Today, the share price is well over $1,000, and the company is worth more than $1 trillion.
This could explain at least some of the excitement surrounding Rivian. These days, EV businesses are simply hot property.
Add in strong backing from Ford and Amazon, pickup trucks that look all-American, even if they run on batteries, and commercial vehicles, and it’s easy to see why the IPO has gained traction.
Rivian isn’t the same as Tesla. Its products are very different, and this is done on purpose. However, investors clearly believe that the company will one day be just as disruptive.
Ford has also invested in the company and is developing its own electric trucks.
According to Karl Brauer of ISeeCars.com, there is a lot of excitement surrounding the brand because of the backing it has already received, as well as the fact that it presents itself as a premium truck brand.
“It’s not just that it’s an electric vehicle. It’s about having a highly effective truck that is powered by electricity “He stated.
“I think people are excited because they feel like there are hints of Tesla here,” he said.
However, he warned that Rivian’s fortunes could be jeopardised by an economic downturn, which would reduce demand, or by mechanical or production issues.
Rivian is already seeing another cloud on the horizon. Laura Schwab, the company’s former vice president of sales and marketing, is suing, claiming she was wrongfully fired after filing a gender discrimination complaint about the “toxic bro” culture at the company.
She also claims to have warned the company that its delivery targets were “unachievable.”