Electric-vehicle startup Rivian, which starts trading on Nasdaq as RIVN today (Nov. 10), is already worth $66.5 billion after pricing its shares at $78 apiece. It’s looking to raise $12 billion—the largest IPO of 2021 so far, and among the top 10 biggest US IPOs ever. A year ago, Rivian was valued at $27.6 billion.
The company, which started off as a sports-car maker in 2009 and pivoted to electric vehicles in 2012, has only delivered a few of its R1T trucks so far—mostly to company employees. Its revenue and sales projections lag its rivals, its supply has been squeezed, and deliveries delayed. It is buried in losses after spending billions in setting up factories and researching battery technologies, and it’ll have to shell out billions of dollars more to increase production and servicing capacities.
So far, the biggest vote of confidence comes from Rivian’s biggest investor and client, Amazon. The e-commerce giant led a $700 million fundraising round for the company in 2019, and announced plans to order 100,000 Rivian trucks.
But before its public debut, the company is already touting for business far beyond Amazon, and doesn’t want to rely on just one big client.
Rivian wants more clients
On Nov. 5, Rivian added a new section to its website, for enquiries about fleet versions of its pickup truck and SUV, its fleet management platform FleetOS, and its charging infrastructure.
The California-based company says businesses can “plan and place their fleet order” in early 2022. Deliveries of Rivian’s commercial electric vans, dubbed RCV, are scheduled to begin in early 2023.
The firm said it will make announcements for financing and leasing options soon.
“The success of our business depends on attracting and retaining a large number of customers,” says Rivian’s S-1 document, filed with the US Securities and Exchanges Commission (SEC). “If we are unable to do so, we will not be able to achieve profitability.”
The company will not only compete with Tesla’s “Cybertruck,” but also with rival commercial models from incumbents like Ford, General Motors, and Stellantis.
What about Rivian’s massive Amazon order?
When it comes to Amazon, Rivian already has a behemoth order to fulfill. It will deliver only 10% of the trucks bought by Amazon next year. The whole order will be fulfilled closer to 2030.
Some language in the S-1 hinted at the deal with Amazon being exclusive. A decade is a long time to be committed to just one client. Especially when it could become a vulnerability. Here’s how: There is some wiggle room with Amazon being able to alter the order size and delivery timeline, and even cancel. Being at Amazon’s mercy makes Rivian’s financial condition precarious.
“If we are unable to maintain this relationship, or if this customer purchases significantly fewer vehicles than we currently anticipate or none at all, our business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected,” Rivian noted in its S-1 filing.
A poor financial performance could make the company less alluring to other clients, and make it harder for it to deliver on other commitments.
On the flip side, success with Amazon does not guarantee a stream of clients either. Amazon’s competitors or other third parties may be deterred from contracting with Rivian because of its relationship with such a big rival, Rivian warned in the document.
Neither Rivian nor Amazon responded to Quartz’s questions.