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Rivian, the EV startup backed by Amazon, applied for an initial public offering (IPO) last week, hoping to be valued at about $50 billion.
Many trading experts thought the expectation was too high, even after Rivian lowered it from its initial aim of $70 billion announced in August.
As it turns out, both estimates were too cautious. By the end of its first day on the market, the electric truck maker was valued at $86 billion, a 29% jump. That puts it on par with General Motors (GM) and higher than Ford.
With only 156 Rivian trucks delivered, some traders are still skeptical of the company’s true value. But with Tesla currently worth $1 trillion and the EV market expected to expand rapidly in the next few years, Rivian might be positioned to be the next big thing in the auto industry.
How did Rivian get here?
Though you probably only heard of Rivian this year, if at all, the EV truck company has actually been around for more than a decade.
Founded in 2009 by mechanical engineer R.J. Scaringe, it initially focused on autonomous EVs but transitioned to pickup trucks and SUVs when it noticed a gap in the market.
In 2017, it revealed the concepts for its first two products—the RIT pickup and the RIS SUV. Pre-orders opened in November 2020, but production stalled due to 2021’s supply chain issues.
In the meantime, the New York Times says the company acquired investors like Amazon, which partnered with Rivian to develop an electric delivery van and now owns about a fifth of the company.
Is Rivian’s $86 billion valuation too high?
Like most automakers, Rivian had a rough 2021. Labor and material shortages brought on by the pandemic threw a bucket of wrenches into the company’s production line. Yet despite the low number of R1Ts on the road, the EV manufacturer’s future looks bright.
The first indicator of Rivian’s potential success is the state of its main competitor, Tesla. Even during the year’s supply chain problems, the EV leader’s value skyrocketed, thanks to the growing prospect of a complete transition off fossil-fuel powertrains.
Rivian’s focus on less saturated EV segments, its partnership with Amazon, and the fact that it managed to deliver the first electric pickup truck to consumers gave traders enough confidence in the company’s position to invest.
But its success ultimately hinges on its ability to take advantage of its new influx of cash and ramp up production to compete with the electric pickups Tesla, Ford, and GM plan to release within the next year.
What much will a Rivian cost to own?
There are many benefits to buying an EV, but the initial cost of ownership is not one of them. The R1T starts at just over $74,000, making it one of the most expensive pickups on the market. Its truck status and electric powertrain don’t do any favors for car insurance rates either.
But there are still ways to save on the cost of owning a Rivian, the easiest of which is to shop for insurance with Jerry.
It’s this simple: download the Jerry app or go to getjerry.com. In less than 45 seconds, Jerry collects all of your information from your existing insurer.
Choose from competitive quotes from 50+ top insurance companies and Jerry takes care of the rest—securing your new policy and helping you cancel your old one. No long forms. No calling around. No hard work. Just savings.
The average Jerry user saves $879 a year on car insurance.