Editor’s Note — Niels de Blijse writes frequently about startups that emerged during the recession. He covers transportation, logistics, mobility, logistics and real estate.
CNN’s Own Sarah Dinan got a sneak peek at Rivian’s all-electric truck and a preview of the company’s plans for the future in a recent segment.
NEW YORK (CNNMoney) — Rivian is a two-year-old Michigan company making electric trucks — the first startup in decades to make a marketable electric truck.
The company just filed for an IPO valued at more than $1 billion.
Is Rivian on the right track, or will its shareholders bail?
Today’s Rise and Fall column will discuss the potentially big gains and big losses that come with an IPO. In the meantime, Rivian is on the right track, according to our own evaluation of its electric trucks.
We visited Rivian and spoke with its CEO. Let’s call him Ravi Belani. Belani is in charge of a factory of 90 people in Michigan — a factory that was never really meant to build cars.
Yes, Rivian built a car called the R1T, a $30,000 electric-powered coupe like the one in the movie “Walking Tall.”
It started the R1T program in 2016, but the plan was just to get the car into showrooms — a sort of automotive incubator.
“We didn’t plan to go public,” Belani told us. “We wanted to show a glimpse of what we could do with all of our factories around the world.”
So, did Belani stick to his business plan or go public too soon?
In the end, Rivian hit the right accelerator pedal and that has yielded great short-term returns. On Monday, Rivian closed at an IPO value of about $2.7 billion.
But to hit that IPO price, Rivian had to show investors it can turn its dream of electrifying the trucking industry into a reality.
Belani told us Rivian’s model will provide solid returns for its shareholders over the long haul.
If you invest in Rivian today, you are betting that its investment cycle won’t crash and burn like others’ did during the financial crisis in 2008.
How did Rivian’s cars fare after they were on the road for a while?
Belani tells us the R1T wasn’t a total disaster and that the company created a new way to buy vehicles, by selling pre-payables to individual buyers. They came back with a new model, the R1X, that looks a lot like a boxy Tesla.
“Everyone was saying the R1T was a failure, but we realized there is an unmet demand for electric trucks,” Belani said. “Tesla is really just a luxury car. People are more interested in an electric vehicle that has a small performance bump than an expensive luxury vehicle.”
In addition to the electric trucks that Rivian built, the company is also developing an autonomous truck.
Rivian is still a little ways away from selling a truck that drives itself, but Belani says it’s well on its way.
“Right now we are testing the truck in 100 mph simulations, but that’s just being used for validation of the software and hardware,” Belani said. “We can start to build a working self-driving system for customers next year.”
Rivian may not be involved in the ride-hailing revolution. You can’t expect a luxury ride in a $10,000 truck, so that makes autonomous driving essential.
And Rivian has a name that helps to get everyone on the same page. Rivian is Spanish for a wild horse — but its technology is often used to suggest that Rivian means a vision, a vision of the future.
Belani says it is a fitting name for the company.
“When you think about the construction of a vision,” Belani said, “it’s the idea of movement — and getting people out of cars and onto motorcycles, on bikes.”
And that is Rivian’s future.
So there’s a robo-chic $2.7 billion price tag for a vision. Not bad. But will investors share in the good times?