The electric vehicle (EV) industry has taken the globe by storm over the last year. Many companies have begun to focus only on the production of EVs, including designing software and batteries in-house.
Rivian Automotive (RIVN), a California-based electric vehicle manufacturer funded by Amazon (AMZN) Ford Motors (F), is one such company that has lately drawn a lot of attention in the EV space. The firm went public through a high-profile IPO on November 10. It sold as many as 153 million shares at an initial offering price of $78.00.
With a market capitalization of $105.8 billion, shares of Rivian have jumped about 19% since its debut.
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Major Growth Driver
The increased investor interest in companies striving to address climate change is a significant driving force for EV companies like Rivian.
Markedly, TipRanks’ Stock Investors tool shows that investors who hold portfolios on TipRanks are growing their exposure on Rivian stock. Notably, about 87.6% of these investors have increased their exposure to Rivian stock in the last 30 days.
The data plainly shows that investors are becoming increasingly interested in the firm.
The continuous worldwide campaign for climate restoration, President Biden’s support for it, and increased demand for alternative energy should all contribute to Rivian’s future success.
Challenges Remain
In order to enhance its position in the electric vehicle sector, Rivian has to overcome a number of obstacles.
Interestingly, the business has yet to generate any meaningful revenue. Furthermore, the company lost almost $1 billion in the first half of this year.
At the same time, Rivian is making every effort to raise sales while retaining its competitiveness, so investors may rest well.
To begin with, the company began producing the R1T pickup truck in September. It also plans to begin manufacturing the R1S SUV in December. The R1T and R1S from Rivian are both fairly priced, starting at roughly $70,000.
Furthermore, Rivian has reached an agreement with Amazon to manufacture 100,000 electric last-mile delivery vans by 2030. Also, the company intends to construct 3,500 fast chargers and 10,000 Level 2 charging stations across North America by 2023.
These considerations suggest that Rivian has significant sales growth potential, and if everything goes well, the company will soon become a key player in the electric vehicle space.
Conclusion
The electric vehicle industry is currently crowded, and it will only become more so. Automobile behemoths like General Motors (GM) and Ford are already transitioning to electric vehicles at a breakneck pace.
So, while Rivian is poised to build a name for itself in the electric vehicle business, it may take some time to do so and win the trust of investors.
Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.
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