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Friday, Apr 19, 2024

Tesla's Elon Musk trolls Rivian after blockbuster IPO

Tesla's Elon Musk trolls Rivian after blockbuster IPO

Following its first two days of trading, Rivian is valued at more than $100 billion

Despite Rivian's blockbuster IPO, Elon Musk has warned that the "true test" for the electric vehicle maker and Tesla competitor's success will be to achieve high production and breakeven cash flow.

"There have been hundreds of automotive startups, both electric & combustion, but Tesla is [the] only American carmaker to reach high volume production & positive cash flow in past 100 years," Musk tweeted.

A representative for Rivian did not immediately return FOX Business' request for comment on Musk's tweet.

Rivian, which is backed by Amazon and favored by Jeff Bezos, raised approximately $11.9 billion in its IPO after selling 153 million shares at $78 apiece. In addition, the company has granted underwriters a 30-day option to purchase up to 22.95 million additional shares at the IPO price.

Following its first two days of trading, Rivian is valued at more than $100 billion, above the market values of automotive giants General Motors and Ford Motor Company. Amazon holds a 22.4% stake in Rivian, while Ford holds a 14.4% stake. Shares are up approximately 3% as of the time of publication Friday.


Though Rivian has approximately 55,400 preorders for its R1T pickup and R1S SUV and has reached an agreement with Amazon for 100,000 electric delivery vans by 2030, the company has not generated any material revenue to date. Rivian said in its amended IPO prospectus that it will lose up to $1.28 billion in the third quarter and that revenue will range from zero to $1 million.

Rivian began production and deliveries of the the R1T in September, which starts at $67,500 and has an EPA-estimated 314 miles of range on a single charge. As of Oct. 31, Rivian produced 180 R1Ts and delivered 156 R1Ts. The R1S, which starts at $70,000 and has an EPA-estimated 316 miles of range on a single charge, is expected to begin deliveries in December following completion of ongoing vehicle validation and all required testing.
The company expects to produce approximately 1,200 R1Ts and 25 R1Ss and deliver approximately 1,000 R1Ts and 15 R1Ss by the end of 2021. In addition, Rivian anticipates its preorders will be filled by the end of 2023. Meanwhile, the company expects to produce and deliver 10 electric delivery vans in 2021.

Rivian recently began production and deliveries of its R1T passenger pickup truck in September, which starts at $67,500 and has an EPA-estimated 314 miles of range. 


Rivian's factory in Normal, Illinois, is currently equipped to produce up to 150,000 vehicles annually. Rivian is aiming to produce approximately 1,310 R1 vehicles and 1,710 commercial vehicles per week, which equates to 65,000 R1 vehicles and 85,000 commercial vehicles, including EDVs, annually.

"We expect to reach a vehicle production rate, which, when annualized, would result in us using 100% of the facility’s current installed capacity of up to 150,000 vehicles by late 2023," Rivian wrote in the filing. "Further, we believe that we will be able to increase the annual production capacity of the Normal Factory up to 200,000 vehicles in 2023 as we introduce additional R1 platform variants and expand the facility. Over the next couple of years, we expect to establish additional domestic production capacity in order to support our product development roadmap and fulfill future anticipated demand."

This isn't the first time Musk has taken a swipe at the competition.

In August, Musk tweeted "Don’t want to be unreasonable, but maybe they should be required to deliver at least one vehicle per billion dollars of valuation *before* the IPO?" in response to reports that Rivian's IPO would value the company's at approximately $80 billion. He also tweeted laughing emojis in response to a report that Rivian was developing a Level 3 autonomous driving system with hands-free capability, similar to Tesla's Full Self-Driving feature.

In October, Musk also responded to a report that the R1T production rate stalled at just over 1 electric truck per day, tweeting "prototypes are trivial compared to scaling production & supply chain."

"If those are solved, achieving positive gross margin is the next nightmare," he added. "Starting a second new vehicle line before first is working will divide resources & amplify probability of failure."

In addition to Musk's Twitter jabs, Tesla has previously filed a lawsuit against Rivian, accusing the company of stealing employees and trade secrets.

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