Rivian, an electric vehicle startup, reveals major losses in its IPO file
Investors are keeping a close eye on how much cash fast-growing startups consume, should they run out. Rivian’s operations used up to $850 million in the first half of this year, about the same amount as in the whole of last year. It said it had $3.7 billion in cash at the end of June, including money it raised when it issued $2.7 billion worth of preferred stock in January. It also borrowed $2.5 billion through “convertible promissory notes” in July.
Rivian has more than $10 billion in investments from Amazon, Ford Motor, and several Wall Street firms. The request said Amazon spent $1.35 billion in Rivian through stock investments and $490 million through the purchase of the notes sold in July. Ford’s total investment is $1.24 billion. Rowe Price, a mutual fund company, invested $2.6 billion.
The filing did not say what percentage of Rivian stock these investors own.
During its often rocky ascent, Tesla ran into production problems that put a huge strain on its finances. Tesla CEO Elon Musk also made missteps that landed the company in regulatory problems and created other disagreements. But the company appears to have won the backing of investors – its $777 billion in stock market value is 10 times that of General Motors.
Rivian’s founder and CEO, RJ Scaringe, is a diligent engineer with a Ph.D. of MIT, it kept a relatively low profile and avoided overselling what the company could do, industry experts say. According to the lawsuit, his compensation amounted to $1.3 million last year. But his salary this year could be much higher, provided that Rivian stock does well. In January, the Board of Directors of Rivian granted Scaringe 6,785,315 shares and a performance-based option to purchase up to 20,355,946 shares.
Rivian said in the filing that it began delivering its R1T truck in September, but did not say how many vehicles it delivered in the month and a company representative declined to provide a number. Rivian plans to begin delivery of its SUV, the R1S, later this year.
The cheapest truck model costs $67,500 and the SUV is $70,000. In the filing, the company said that as of September 30, it had approximately 48,390 orders for its truck and SUV in the United States and Canada from customers who each paid a refundable deposit of $1,000.
Rivian models are part of a wave of electric vehicles entering the market to challenge Tesla. Earlier this year, Ford Motor Company began selling an electric SUV, the Mustang Mach E, and Volkswagen introduced its own electric SUV, the ID.4. Ford is preparing to add an electric version of its F-150 pickup truck next year. The F-150 is a work truck and will not directly compete with the Rivian, which is more marketed as a recreational vehicle.