Tesla rival Rivian’s blockbuster IPO gets strong response from Elon Musk

 

On Thursday, Elon Musk tweeted his opinion on rival Rivian’s blockbuster initial public offering (IPO) this week. He said that high production and break-even cash flow should be the true test for his rival. Rivian has not as yet recorded revenue and said that it expected to earn less than $1 million in sales for Quarter 3. Despite these figures, the company has a market value of over $100 billion after its IPO.

Musk said that there had been hundreds of electric and combustion automative startups but Tesla was the only “American carmaker to reach high volume production and positive cash flow in past 100 years.”

He added that he hoped that they [Rivian] would be able “to achieve high production and breakeven cash flow” as that was the true test. Musk has criticized Rivian earlier as well.

CNBC asked for Rivian’s comments on Musk’s latest tweet but has not as yet received a response. However, the company has said that it already has 55,400 preorders to manufacture its R1S SUV and R1T pickup truck. It also mentioned a huge Amazon order of 100,000 electric vans that would be delivered in the next two decades, by 2030.

Rivian raised about $12 billion on its debut on Wednesday. This is the largest IPO offering in the market in the world, in 2021. After the IPO, the company has been the second most valuable automaker, after Tesla, which leads the auto industry.

Investors have gambled on its success by making its revenue and value more than traditional auto giants such as Ford and General Motors. Its CEO and founder R. J. Scaringe’s 17.6 million stock is worth about $2.2 billion, as of Thursday’s closing stock price of $122.99. Pre-market trading Friday saw another 3 percent surge in Rivian’s stock.

Scarings, who had lured away a few engineers and other employees from Tesla said in the IPO that the company aimed to “demonstrate how a clean-sheet technology-focused vehicle could eliminate long accepted compromises.”

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