Late last week, Rivian submitted 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 an estimate of up to $ 80 billion. That would make Rivian one of the world’s most valuable carmakers, worth billions more than Ford or GM – and its trucks aren’t even on the road yet. Rivian’s first vehicle, a $ 73,000 pickup, is expected to begin shipping in September, and a second model, a $ 75,500 seven-seater SUV, is expected to be launched next time.
In some ways, Rivian’s weather is good. President Joe Biden recently issued an executive order calling for electric vehicles to account for half of all new car sales in the United States by 2030, and a growing number of legacy carmakers have pledged to relocate their electric vehicle production over the next two decades. .
But as the world continues to fight the pandemic, Rivian faces some serious challenges. The shortage of semiconductors has slowed down and halted production in the automotive industry. There are also not that many charging stations in the United States, which leaves some potential buyers of electric cars worried that they will run out of juice.
“It’s a big deal to have more public infrastructure,” Jeremy Mihalek, a professor of engineering and public policy at Carnegie Mellon, told Recode. “Probably the first priority is to make sure there are fast enough chargers at highway break stations so you can pick up your car wherever you want to go.”
Like Tesla, Rivian sells home chargers and develops a national charging network. The company plans to have 10,000 stations available by the end of 2023, many of which will be in remote areas. Just as Tesla did, Rivian uses an AI-focused approach to its vehicles. Rivian is investing heavily in its hands-free technology, semi-autonomous driving with a set of features called Driver +, which is very similar to Tesla’s autopilot. In a lawsuit, Tesla even accused Rivian of stealing his trade secrets after hiring his former employees.
But the big difference between Rivian and Tesla is the type of electric vehicles the two companies sell. After being founded in 2009 and remaining hidden for years, Rivian announced in 2018 that its first models will be a pickup and SUV designed for off-road driving. This is a remarkable difference from Tesla, which focuses mainly on the sale of cars and crossovers. (Tesla announced its first Cybertruck pickup in 2019, but deliveries were delayed until 2022)
Rivian is also attractive to commercial customers, including its influential supporters. After participating in two rounds of funding for the launch, Amazon last year pledged to purchase 100,000 electric vehicles for delivery from Rivian by 2030. Former Amazon CEO Jeff Bezos and three other passengers on Blue Origin’s first manned flight on board they even rode in a Rivian jeep to a launch site.
Ford, which has plans to launch an electric version of its popular F-150 pickup next year, is also investing more than half a billion dollars in the launch of electric cars.
The difficult time for Rivian’s IPO
There is no doubt that President Biden is enthusiastic 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, the White House and Democrats in Congress are pushing the postal service to buy as many as 165,000 electric delivery trucks. Biden also wants to allocate $ 174 billion to build 500,000 electric vehicle chargers nationwide. (Tesla CEO Elon Musk also promised to open Tesla Superchargers for electric vehicles from other manufacturers.)
But as electric cars become more popular worldwide, the United States is facing slower growth than China or Europe. Global electric vehicle sales rose 41 percent last year, according to the International Energy Agency, an intergovernmental energy policy consultancy. While sales of electric vehicles in the United States lag behind those in China and Europe, sales of hybrid cars are rising, indicating that more consumers could warm up to electric vehicles.
In a recent Pew survey, about 7% of Americans said they owned an electric or hybrid vehicle, and 39% said they would consider buying it. The higher price of electric cars is certainly a contributing factor to the slower adoption rate in the United States. But the price of batteries, which are the most expensive part of electric vehicles, is falling, so Americans may see cheaper electric cars in the future.
Obstacles from the pandemic era have also affected the automotive industry. Rivian, who was originally scheduled to launch his pickup in July, twice delayed the delivery of the vehicles. Late last month, Rivian founder and CEO RJ Scaringe told customers who had pre-ordered vehicles that Covid-19 had intervened in everything from “building the facility, to installing equipment, to delivering components.” for vehicles (especially semiconductors) ‘. The same shortage of chips has forced Tesla to rewrite the code for its vehicles, and experts worry that the lack of semiconductors could slow down the production of the new electric Ford F-150.
Still, if Tesla’s success is an indicator, Rivian will find willing outdoor customers who want an electric car to drive off-road. Given the current challenges, the company is working hard to stand apart from Tesla and the growing number of inherited carmakers who want a share of the electric car market. Jeep is expected to release an electric version of its Wrangler by 2023. President Biden has already made a test drive.