Rivian, an electric-car startup, filed its papers for going public. If you're unfamiliar, Rivian manufactures electric vehicles that are sleek, friendly, and intelligent. The Rivian R1T, its entry-level electric vehicle, starts at $67,000, with the top trim costing moreover $73,000. Rivian's automobiles are premium, yet Americans often pay $40,000 for luxury family haulers that look like pickup trucks. Rivian claims that cheaper models will be available in a few years once it fine-tunes its approach to premium products. Tesla took the likewise route.

Rivian plans to earn $8 billion in an initial public offering (IPO) around Thanksgiving, valuing the firm at $80 billion. If the EV maker is successful, it would have one of the largest IPOs in the American market in the last decade, raising nearly the same amount as Uber did in 2019. However, another historical parallel raises an eyebrow. In 2010, General Motors emerged from bankruptcy and garnered $20 billion in an initial public offering (IPO). GM has sold hundreds of millions of automobiles by that time in its 102-year history. Rivian has been in business for 12 years and claims to have delivered its first automobiles to clients last month. However, if Rivian has its way, the stock market will value both companies at around $80 billion by the end of the year.

Without being too gushy, Rivian exemplifies President Joe Biden's economic vision. A technical person founded it. Rivian truly produces something valuable, a tangible item that you can drive and touch. Its manufacturing plant is not just in the Midwest but also in a town called Normal. Because it requires funds rapidly, it goes public through a standard IPO rather than a trendier and more founder-friendly transaction.

Simultaneously, Rivian is a sort of technological business that has learned from the modern-day West Coast behemoths. It aspires to be vertically integrated in the same way as Apple is: you will buy a new gadget from Rivian directly, purchase intangible Rivian services via that device's software, and bring the device into a Rivian Store when it breaks. Rivian engineers will create the physical hardware, which will be tailored to run Rivian software. The only difference is that the gadget will be a four-ton electric pickup truck instead of a phone.

And Rivian has achieved its current position with the assistance of two economic behemoths in the United States. Amazon owns at least 5% of Rivian's stock and has made an order for 100,000 delivery electric cars with the firm, the largest single purchase of EVs ever; the megaretailer's name appears more than 80 times in Rivian's IPO filing. Ford also owns a significant portion of the corporation. (At first, Ford and Rivian wanted to work on an electric SUV, but the arrangement fell through.)

One of the truisms in financial news reporting was that private industry had overshadowed public markets. In the 2010s, there was so much cheap money floating around that the Ubers and Airbnbs of the world could run at an indefinite loss on the backs of private-equity and venture-capital firms without having to face the scrutiny of going public. It's unknown whether Rivian's preference for private markets will survive the epidemic recovery, but it's easy to understand why. Its IPO filing reveals that the firm is losing money, but so was Uber; the ride-sharing company lost $8.5 billion in 2019, the year it decided to go public.

However, one industry where public markets obviously outperform, at least in the eyes of the founders, is electric vehicle manufacturing. And, with apologies to Grimes, we can thank Elon Musk for it. Musk was successful in enticing regular investors—people who do not work in finance and are sitting at home with Robinhood or E-Trade open—to fund the hefty expenses of the energy transition. As a result, Tesla's valuation has risen from around $43 billion to $784 billion since August 2019, representing a 1,700% increase. Tesla, which sold just under 500,000 vehicles last year, is now worth more than twice as much as Toyota, which sold over 9.5 million. Its stock price has grown so far that shorting it has become prohibitively expensive, and the company's detractors have all but abandoned up.

Elon Musk demonstrated that the public would pay an inevitable component of the energy transition, namely the shift from internal-combustion engines to electric vehicles. That would be an important accomplishment if it didn't result in a $100 billion windfall for Musk. Manufacturers of EV components, chargers, and batteries are now going public so often that you're likely to miss them unless you're paying careful attention to financial markets. Wallbox, an EV charging company, went public yesterday via SPAC; Polestar, Volvo's EV spin-off, went public last week. The EV industry is now so frothy that environmentalists should be concerned: Is Tesla truly nearly ten times more valuable than General Motors? And, if not, will the EV sector as a whole be able to recover from the bursting of Tesla's bubble?

Rivian said in its statement that it had donated 1% of its shares to Forever, a new charitable effort that would promote environmental and conservation issues. In this regard, it is similar to the outdoor retailer Patagonia, which has vowed to donate 1% of its revenues to conservation. And therein lies a stumbling block for the carmaker, a choice that is not totally in control. Rivian has the potential to become Apple, a hugely wealthy company that combines engineering and exclusive design to bring new high-tech and a specific artistic style into the public. Or it may be similar to Patagonia, an upmarket brand that, while representing expedition-level excellence, caters to a smaller, more cosmopolitan portion of society. Its decision and ours will help decide the role that EVs will play in America's decarbonization over the next few generations.


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