Charging stays a problem for all firms introducing electrical autos. While stations can be found in lots of city facilities, their numbers are fewer in suburbs and lots of much less densely populated areas haven’t any charging infrastructure. That might be a specific situation for Rivian because it expects house owners to take its autos out into the wilderness the place the closest charging station might be many miles away.
The large query hanging over younger electrical car firms is whether or not they have sufficient money readily available to finance their growth when gross sales are nonetheless low. Rivian used up $3.5 billion of money on operations and capital spending from the beginning of 2020 via the tip of June this yr. But Rivian seems to have the ability to finance its growth into the close to future. It had simply over $5 billion of money readily available on the finish of September, and the I.P.O. will herald almost $12 billion.
Rivian’s I.P.O. was one of many largest in recent times, exceeding Uber’s 2019 providing, which raised $8 billion. But it’s smaller than Facebook’s 2012 providing, which raised $17 billion. So far this yr, firms have raised $290 billion in 901 offers, in contrast with $169 billion raised in 457 offers in all of final yr, in response to the information service agency Dealogic. The inventory market is taking part in an important function in funneling cash into new sectors of the financial system, together with firms deploying inexperienced know-how.
But to some analysts, traders are simply throwing cash at what’s sizzling, and never doing sufficient to discern which firms are literally robust. “The market’s pricing mechanism is broken and you can’t see the real successes,” mentioned Mr. O’Rourke of JonesTrading.
But Mr. MacDuffie. the Wharton professor, mentioned he believed there was sufficient potential development within the electrical car market for a lot of firms to succeed. “It’s not so much a winner-takes-all market,” he mentioned. “We are probably more at a rising tide lifts most boats, if not every boat.”
Investors that took an early stake in Rivian, Ford and Amazon included, are sitting on large features. Ford’s Rivian shares have been value $10 billion at Wednesday’s closing worth and Amazon’s a minimum of $16 billion.
And Mr. Scaringe, Rivian’s chief government, can be sitting on a fortune. His shares in Rivian are value over $1.7 billion. And this yr, Rivian’s board permitted a brand new inventory award for Mr. Scaringe that might be value over $7 billion if the inventory trades as excessive as $295.