Amazon-backed EV maker Rivian discloses nearly $1B losses in IPO filing | Hacker News Reader

Amazon-backed EV maker Rivian discloses nearly $1B losses in IPO filing

finance.yahoo.com

39 pointsevo_950 comments

They have zero revenue because they haven’t shipped any vehicles yet which should start soon. They spent $1b to build factories and cars. Maybe I should buy when their stock opens if lots of people are missing this bit.

I'm not placing any bets on whether they'll succeed. But if they have roughly 50k pre-orders at ~$70k/each that's $3.5 billion in revenue. And while I'm sure not everyone who pre-ordered will actually make a purchase, there are still a ton of people who aren't aware Rivian exists who can fill that gap.

And that's excluding Amazon's orders which they expect to make up most of their revenue.

So Pre-revenue and Pre-Production and yet command $80 Billion valuation into an IPO.

That is all good in the VC/PE world were investors have resources to evaluate and access to a lot of confidential data when evaluating a target.

For retail investors like you and me, that is a enormous risk, neither have we the average investor the time or knowledge/skill and access to critical information to meaningfully evaluate this early stage company.

There is lot of steps and risk from selling to your key investor to the entire market and to scale production to hundreds of thousands of units a year this valuation seems to have already priced in at negligible/zero .

I personally believe that out of all the electric car startups that have sprung up after Tesla, Rivian and Lucid are the 2 that are most likely to put out a product and potentially have some staying power, or get bought out.

It's also worth noting that Ford has invested in Rivian (first or second major round I think?) in return for some of their tech. If you're a believer in the staying power of the F-150, then this could be viewed as a win for Ford as well.

Rivian does seem like the real deal. I first noticed them when prototype versions of their SUV truck were used for the recent Apple TV+ series Long Way Up [1], where Ewan McGregor and Charlie Boorman ride electric motorcycles from Ushuaia to Los Angeles, with a production team following in those Rivian cars. The crew absolutely loves the Rivians, and as far as I remember, they only experience a minor hiccup.

[1] https://en.wikipedia.org/wiki/Long_Way_Up

I think Rivian and Lucid will not be around in 10 years. Legacy makers will still dominate. EV doesn't change the fundamental nature of the car sector, which is capital intensive, low-margin, and very buying cycle.

However, longer term, EV will follow the path of Android as cars become more autonomous. Things like driving dynamics, active and passive safety innovations will matter less and less.

The only thing that will matter at that point is data, software, and battery technology, which Tesla dominates. I wouldn't be surprised 20 years from now, if Tesla isn't even making any cars.

I don’t necessarily agree with most but it seems like Tesla becoming a battery company primarily is interesting enough to give it a look.

The main reason they’d probably want to be a car company is margins - I’d bet the battery market blows up with competitors as it’s sort of doing now and it’s almost too much of a risk to be all in on just batteries, where if you’re a battery wholesaler any shift in say resource mining availability could create pressure, where if you have a decent margin product on the back of it you can “eat” those costs, and also aren’t beholden to other customers. The legacy auto industry doesn’t treat suppliers well.

"However, Reuters reported in September that it could seek a valuation of nearly $80 billion, raising up to $8 billion in its IPO."

$80 billion??? It would be 95th on SP500.

Sigh.

Toyota = 300 billion vw = 140 billion Daimler = 95 billion. GM = 77 billion BMW = 55 billion Ford = 55 billion Honda = 55 billion. Hyundai = 42 billion

Whatever happen to efficient market valuation?

That just tells you how little faith everyone has in the existing players launching a competitive, modern EV. The Model S has been on the market for almost 10 years now and there is still zero competition from the large OEMs.

Conpanies like Nissan have reliable EVs that have been there for a while (the Leaf). However they make more profit selling petrol-powered SUVs, so the dealers don't promote them.

When I tried to buy my Leaf, the sales guy tried to get me to buy another model, and a month after buying the car, I was getting spam for a Pathfinder (monster SUV).

I also see a lot of WV e-Golfs on the road, and Chevy Bolts. I don't know how reliable they are (Chevy have battery problems), but I think there definitely is competition.

None of those are competitive with Teslas.

Range, performance, comfort, features are all miles ahead in the Tesla. Price may be the only factor they're competitive, but the sales numbers don't lie. Nissan has sold 500k Leafs in the last 10 years. Tesla sold 440k Model 3s in 2020 alone.

Also, the EV aspect of Teslas is not the only thing that attracts buyers. I know many here on HN don't realize this, but people love the OTA updates that make your car better over time. Tesla takes a software company approach to cars. I don't have faith in any of the existing manufacturers pulling that off. It's a completely different business model that none of incumbents show any proficiency in.

I'm a Chevy Volt owner, I love that car, and given my driving habits I'm on electric 95+ percent of the time.

That said, highlighting the Leaf, e-Golf and Bolt only make the legacy makers look worse in my opinion. I mean, how many times have you heard any of those vehicles be spoken about as "an object of desire". Most people view them as a "good thing" the same way as they view a colonoscopy as a good thing: a wise thing to get but certainly not something you're excited about having.

So far in my experience the only legacy automaker that is putting out truly compelling electric vehicles is Ford with the F-150 Lightning and the Mustang Mach-E.

I was pretty close to get a mach-e, but the huge premiums that are being added, dealer bullshit and multiple youtuber road trip tests showing it's not there yet charging network wise makes me hesitate.

Tesla's stealth advantage in the USA is their reliable charger network, if they open it up they might enable their competitors more than they think, especially after the car shortage ending makes buying from a dealer less painful.

OTOH the Prius was never an object of desire, it was more a very economic option that made a lot of sense. None of those EVs are anywhere near in the same class, but one could pop up like that.

I think it’s more likely that the market is flooded with mediocre EVs just as it’s currently flooded with mediocre gas vehicles. 2022 and 2023 have things like the f150, Honda Civic, Toyota Camry, and Ford Explorer coming out in EV variants.

> OTOH the Prius was never an object of desire

I disagree. It was never an object of desire in the same way Tesla's are, but it was desired in the sense that many made the decision to buy a Prius primarily for social signalling reasons - it became almost cliché that a Prius meant "look how environmentally conscious I am!" This was famously parodied it what was my favorite South Park episode of all time, "Smug Alert".

Not only that, but the Prius was practical. Most of the EVs on the market are not. Their range alone makes them a non-starter for most people.

The Prius is a pinnacle of practicality. Great gas mileage, reliable as hell, cheap to repair, and it’s a hatchback.

We will soon get electric Bentleys and Rolls Royce. I'm pretty sure that at that point those vehicles will be spoken about as "an object of desire".

Traditional manufacturers didn't make great EVs because they couldn't make much money with them.

Another thing...Porsche already has a desirable EV. Benz EQS is not that bad either.

This is the classic innovators dilemma. The established players are afraid to cannibalize their more profitable existing product lines, which presents opportunities for new companies that don't have existing products to cannibalize.

That's probably why the markets are betting the way they are.

And the Bolt is great. Just make sure not to park within 50 feet of anybody else [1].

[1] https://www.greencarreports.com/news/1133604_gm-asks-chevy-b...

>Conpanies like Nissan have reliable EVs that have been there for a while (the Leaf). However they make more profit selling petrol-powered SUVs, so the dealers don't promote them.

I recently was looking at purchasing a used Leaf Plus (the new gen) but I was utterly shocked to discover threads on the Leaf subreddit discouraging people from taking long roadtrips on the Leaf because the battery overheats and will reduce the charging speeds. You cannot just go from charge > drive > charge and expect the same speeds. I was about to move from NJ to California and driving across the country :/

Now I am forced to look at the Volt as that is all I can afford. I don't even like this car but I want to get onto at least a semi zero emission platform.

The Teslas have tons of problems, (random build quality, poor parts availability, high insurance caused by the above). Someone who wants a reasonably priced EV that they can use under all circumstances as a regular car don't have many options right now.

My coworker has a leaf, but must keep their high school car around because the leaf doesn't have enough range in the winter.

Tesla nairled the excitement factor that nobody else has

I thought Nissan Leaf had poor reputation for bad battery management.

Based on the specs, range, and reputation, I'm eager to see how the BMW i4 does when it comes out next spring.

Market cap is deflated by debt, pension obligations etc. Many of the big US car makers, apparently, pay pensions from their own balance sheets.

'Enterprise value' is the metric, derived from market cap, that corrects for it. "How much is this company's living organism worth, without caring about debts etc.". There Tesla, and Rivian presumably too, look less good, since their EV is not encumbered by decades of debt and pensions.

Still...

Market cap = number of shares * price per share

Enterprise value = market cap + debt

The thinking is that to buy the company you need to buy the equity and then retire the debt, therefore when a company takes on more debt this increases enterprise value.

Another way to think about it is the liability side of the balance sheet. You make $20 in debt and $30 in equity so your total liability is $50. Then market cap = 30 and enterprise value = 50.

> Many of the big US car makers, apparently, pay pensions from their own balance sheets.

No, pensions are paid out of pension funds, which is an off-balance sheet liability. The only way it kinda indirectly would show up on the balance sheet is if the automaker got sued for underfunding their pension fund and had to issue some debt to make up the shortfall.

You're thinking of market value, I think. Enterprise value is primarily (market value + debt - cash). Market value does not include debt.

Yeah, so if I have 2 companies with same intrinsic value but one with, one without debt, the one with debt has lower market cap. Hence “deflated”.

Not explicitly, but it can influence the price, in turn influencing the market value.

Haven't you seen the various mental gymnastics people use to value electric car mfgs? Sprinkle some technology on an otherwise low-margin industry and suddenly people think you have the next Google or Facebook. Nevermind that the big tech companies became so profitable because they make money off easily scaled SW. No, this time it's different!

> Whatever happen to efficient market valuation?

GME 13 billion

AMC 19 billion

HOOD 35 billion

DOGE 29 billion

Retail and memes.

One of those is not like the other...

> Whatever happen to efficient market valuation?

Efficient market hypothesis is entirely fraudulent. It always will be. Fortunately, so investors can keep taking advantage of the endless market inefficiencies.

EMH is the equivalent in market theory of believing the Earth is flat. A person has to be wildly irrational and detached from the ability to properly utilize basic reasoning skills in order to buy into it.

It feels like Rivian is that gif of the truck about to hit that barricade but after every cut it just loops and never does. I would have expected it to start shipping but how many years has it been teased? Is there a firm launch date yet? I did see all the usual YouTubers post their PR campaign at the same time recently so it must be soon right? Right?

I just saw my first one last week. It had manufacturer plates though. Last week was the big press launch, of production vehicles. Car and Driver is driving one across the Trans America Trail right now.

I believe the first customer car rolled off the line Sept 20. First deliveries were supposed to have been in Sept. It looks like they have, in fact, started.

If you try to order one now they say "January delivery" which surprised me that they could promise so soon with so many preorders.

Alternate title: "Rivian, who is aggressively investing in building their business, files for IPO"

Just wondering when anyone in the media is going to figure out that it takes a f*ck load of money to build a modern auto manufacturer. Hell the incumbents aren't even willing to spend the money

Yes it takes a lot of money to succeed in the auto biz, but that doesn't mean any companies spending a ton of money will automatically succeed.

Retail investors/ Media do not have access to critical information it takes(or skill) to evaluate a early stage company like Rivian the kind a VC/PE would have.

They are effectively pointing the problem of very early stage companies without revenue or production going for IPOs.

Rivian is not even the first large one in the auto space doing a pre-revenue / pre-product IPO, tuSimple did one in April at $8.5 B valuation.

“Rivian, an EV manufacturer whose investors include Amazon filed to go public. The move would offer a more liquid funding source for the company, in line with markets that are increasingly looking to invest in giant markets earlier.”

They have $3B cash on hand or enough to survive 3 more years selling zero cars.

80 billion valuation on pre-orders is just another level.

Tesla is valued at 10 times that, and if you subscribe to the old-auto-industry-having-problems-to-compete-with-Tesla hypothesis, then Rivian has the potential to become another dominant car company in the market. It’s clearly a bet, but it’s not a disconnected from reality bet. In fact, in a world where tesla already pulled it off, it sounds more grounded than the Tesla story.

Tesla’s market cap was $60B just two years ago, before model 3 production really ramped up, and the crazy stock bubble began.

By that point, it’s first production car was a decade old, and the company was on the verge of hitting 1 million vehicles produced (March 2020). So yeah, $80B for a competitor in the pre-production stage seems quite steep.

Tesla's market cap was not tied to the number of cars it was shipping at any specific point but rather how much confidence investors had in their ability to execute on their plans and scale up in the future. When you look at Rivain's team + product + funding I think it's not unreasonable to have a high level of confidence in their ability to execute.

Tesla was the only one who "old-auto-industry-having-problems-to-compete-with-Tesla", the market space is not infinite. Now Rivian is certainly one who "old-auto-industry-having-problems-to-compete-with-Tesla", but there is another who can supposedly do it better? If Blueorigin cannot catch up SpaceX, there is no reason to believe Rivian can share the same market standing as Tesla.

When you buy anything Amazon, it comes Alexa-enabled with the best engineering fungible staffing can provide.

> with the best engineering fungible staffing can provide

This is such a fantastic dig at Amazon and strikes at exactly what's wrong with their culture. It's a machine. The engineers don't matter. Rotten from the top.

I honestly don't understand why anybody would want to work there. Better salaries and jobs exist.

You live in Seattle and the alternative HQ position is MSFT, and you got a good non-standard offer. If Amazon & MSFT were in the bay, I'm fairly certain they would clean up their acts.

Wait, you can IPO without actually having shipped anything?

Cookie wall, so no idea what it says, but Rivian was a major player in the excellent Ewan McGregor documentary “Long Way Up” (2020)

Great documentary, and really enjoyed watching Ewan drive an electric vehicle from South America to LA. It was possible 5 years ago, and it’s even easier today. The world is changing and this is a great thing.

Yup! Also enjoyed the other two docs (Long Way Round and Long Way Down) but those were using non-electric vehicles.

I'm watching that now, and it's definitely making me consider an electric motorcycle for my next bike.

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