Photo: Rivian
Rivian will soon have its IPO (initial public offering) and had to file a Form S-1 with the SEC on October 1, 2021, to pursue that. That document is filled with exciting information. Some articles have shown that Rivian had a $2.438 billion net loss. Sadly, they did not put into perspective that $1.75 billion of those expenses were for R&D (research and development), which makes all the difference.
The EV startup has just started to sell its vehicles to regular customers. The company also has a deal with Amazon for delivery vans, but we have no idea if Amazon will pay Rivian as it gets delivery or if it has already paid for all of them. If that’s not the case, Rivian has just been introduced to making any money selling cars with its passenger vehicles.
The company also disclosed it had 48,390 pre-orders for its electric pickup truck and SUV until September 30, respectively, the R1T and R1S. With prices ranging from $67,750 and $73,000 for the former and $70,000 and $75,500 for the latter, let’s assume an average price of $70,000. If these 48,390 reservations turn into effective sales at that average value, that would earn Rivian $3,387,300,000. In other words, selling them would already cover these R&D expenses and even the net loss, including investing in employees and the Normal factory. But there’s more to come.
Rivian expects to have $8 billion in capital expenditures until 2023. That’s because it will have a new factory in the U.S. and another one in Europe apart from more money spent on R&D – the only element that the company explicitly confirms in Form S-1. These new factories should manufacture different vehicles than those already made in Illinois.
Thankfully for Rivian, it has kicked off its operations in a very unusual manner. Tesla criticized it for spending 12 years without selling a single vehicle probably ignoring that this is exactly what gave the company its current edge: deep pockets to get started as it wanted, not as it could.
So far, Rivian said it managed to raise $10.5 billion, which covers the money it spent on R&D and other expenses that composed its net losses. If it disburses $8 billion more until 2023, that will be very close to the money it has raised so far. In other words, Rivian would not need the IPO to carry on with its current investment plans. The IPO should just make it easier.
The document did not reveal the date on which Rivian expects to offer its shares to the public. What we do know is that it expects its valuation to reach $80 billion. Let’s see how much more money Rivian can raise in the process.
The company also disclosed it had 48,390 pre-orders for its electric pickup truck and SUV until September 30, respectively, the R1T and R1S. With prices ranging from $67,750 and $73,000 for the former and $70,000 and $75,500 for the latter, let’s assume an average price of $70,000. If these 48,390 reservations turn into effective sales at that average value, that would earn Rivian $3,387,300,000. In other words, selling them would already cover these R&D expenses and even the net loss, including investing in employees and the Normal factory. But there’s more to come.
Rivian expects to have $8 billion in capital expenditures until 2023. That’s because it will have a new factory in the U.S. and another one in Europe apart from more money spent on R&D – the only element that the company explicitly confirms in Form S-1. These new factories should manufacture different vehicles than those already made in Illinois.
Thankfully for Rivian, it has kicked off its operations in a very unusual manner. Tesla criticized it for spending 12 years without selling a single vehicle probably ignoring that this is exactly what gave the company its current edge: deep pockets to get started as it wanted, not as it could.
So far, Rivian said it managed to raise $10.5 billion, which covers the money it spent on R&D and other expenses that composed its net losses. If it disburses $8 billion more until 2023, that will be very close to the money it has raised so far. In other words, Rivian would not need the IPO to carry on with its current investment plans. The IPO should just make it easier.
The document did not reveal the date on which Rivian expects to offer its shares to the public. What we do know is that it expects its valuation to reach $80 billion. Let’s see how much more money Rivian can raise in the process.
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