[RahulNagaraj]

Rivian, the American EV startup, has been valued at over $150 billion, post its IPO; making it the 3rd most valuable automaker in the world. Rivian has now overtaken the likes of Ford, General Motors, Volkswagen and even Daimler (the parent company of Mercedes-Benz).



The EV carmaker now sits behind Tesla and Toyota, the only two automakers with a higher valuation.



Rivian is backed by Amazon and Ford and is slowly ramping up production of its R1T pick-up truck and R1S SUV offerings. The company recently announced the roll-out of the former while the production of the latter will begin sometime next year.

Source: Business Insider

Link to Team-BHP news

[Electromotive]

Nice vehicles, competent company, UGLY valuations.
Markets will remain irrational till the competition shapes up and that's happening faster than these startups can scale or the investors realize. BEV roller-coasters anyone?

[Vibhav-Van]

Such insane valuations are downright dangerous. The worldwide debt bubble is flaring up rapidly, and I'm afraid the burst will be very very harsh. I wish there would be a magic pill. How can a young car company without great sales be worth more than auto-majors who have been selling millions of vehicles for decades? Truly insane!

[nightraven]

This is insane. Tesla itself isn't worth that humongous valuation and now this! This is truly bizarre and shows how wall street valuates companies for their own gains and greed. It's only a matter of time before competition catches up in the next 2-3 years with models like Mach E, F150 Lightning, Hummer, VW ID series already on sale and EV variants of mainstream models from BMW and MB on the way. When competition fully transitions to EVs one way or another in the coming decade (which they have to due to tightening ICE regulations), this bubble like many others will burst and I hope it wont cascade in to another bad recession.

[Mustang Sammy]

Ridiculous valuations. This when industry heavyweights like Ford are coming out with good electric trucks of their own.
Things will get ugly for sure.
A massive crash and/or hyperinflation is coming unless the reserve banks wind things down in an orderly manner, although it may already be too late.

[MinivanDriver]

Well, on the positive side, these valuations are funnelling investment in to a green technology of the future. This would encourage other innovators to develop green technologies as well. I am looking forward to more breakthrough innovations in sustainable battery technologies, green power generation, toxic waste clean up, carbon capture etc.

[shashi792]

Originally Posted by Mustang Sammy

A massive crash and/or hyperinflation is coming unless the reserve banks wind things down in an orderly manner, although it may already be too late.

Right on point. I somehow feel this is inevitable. Just look at the IPO line-up from the Indian Stock Exchange perspective itself. Few companies are so much over-valued for what it offers.

[Sran]

Pump and Dump. Hedge funds will make billions and small equity investors will lose. Municipality, sovereign and pension funds will bankrupt themselves, while big investors will laugh towards bank. The valuation will rise and then big investors and hedge funds will offload at a premium. Rivian believes they can take Ford or Dodge truck market. In this time where there is a huge chip shortage, how can anyone bet on a vehicle manufacturer and that too an EV manufacturer is beyond logic.

Nykaa is a big blunder going on in India. It will tank within 2 quarters. Nykaa is bleeding money in offline market(they sell products on discount to beauty stores and salons and have a whole offline B2B division). Zomato will be steady at low valuation because people are still bullish on food delivery platforms providing jobs but restaurants will fight back the 25-30% commission and then we will see how long zomato and swiggy can sustain themselves on deliveries of cheap third class biryani and noodles. Zomato will eventually become Reliance Power. This market is not making any sense.

I just wonder who are these girls who prefer online shopping instead of going to markets. Every girl I have known will go out for shopping at a drop of a hat even for a nail filer. I have lost countless hours of my life from teen to this age, picking and dropping sisters and other women family members to markets and they even in covid times never bought anything online and dreamed of opening up of markets to shop. I think Nykaa has pulled a con convincing investors that Indian woman like to shop online. You can not take shopping in markets out of Indian females, its just not possible, they live to go out and shop.

[sandeepmohan]

Originally Posted by nightraven

Tesla itself isn't worth that humongous valuation and now this!

Maybe not but they are still the only car (or technology) company that has built an eco system for itself. No other manufacturer can hold a candle to what Tesla have done to date. It is a car everyone aspires to own. Talk about EV and that's the first name to come up and for good reason, they've been making electric cars for over a decade and have proven that EV's are the way forward.

You can't compare Rivian, Lucid and many other up coming or start up EV car companies to Tesla. Atleast not until they've had their cars on the road for few years. Love him or hate him, Musk has done what nobody ever thought would be possible and he did not stop with the car.

Rivian is going to be a bit of a wait and watch. I think the next game changer in the EV space is going to come from Apple.

[neerajku]

Whether hedge funds lose or make money is a separate question, they are the ones who took the risk ab initio and not the small investors. I dont have data but I am sure they lose money in 9 out of 10 and make enough to sustain and proposer in one of them.

Small investors are not as uneducated or silly as many of us believe them to be. They also take risks, may be at a later part of business cycle. Sometimes they make money if the business is fine and sometimes they lose as business did not take off well. Some trying to ride the wave do get burnt badly though if timing is wrong.

My point is, anger, dismay or even astonishment over sky high valuations of e world companies is not new. But most of the time they have surprised us. Look at Tesla, still doing well despite all kinds of production supplies problems and critical evaluations. Innovator par excellence and their products are aspirational.

Many of us laugh at apple valuation saying it is a one trick pony. Quarter after quarter they have cocked a snook at us with the same product line doing exceedingly well. Amazon faced similar criticism that they dont make money. Ultimately they did, in cloud as well as ecom. Many of these are smart and know they have something unique and customers want them.

People have been making fun of Nykaa or Zomato but the fact remains that Nykaa makes 2000 core plus in a year selling mostly cosmetics and Zomato with its only product: a solid delivery chain makes 3500 cores a year. We may accept it or may not, saying who buys beauty products online? Or why buy food online when you can make it at home...but week after week they are making more revenue. And I am sure they willl make profits also in a few years.

Believing that traditional ones will strike back and e world companies will be scouring for cover is not always correct. What did traditional retailers do in US? They were big, mighty, had brand, data. most folded up. What is Maruti doing now? Ignoring EV is threat. May be the are right, may be this ostrich behaviour will be their doom. Only time will tell. But facts remains that traditional leaders may not be the smartest and have a lot of hubris. Look at how Seltos and Creta have drained profits out of car market and left Maruti selling low margin espresso.

Paytm may be an aberration as it does not seem to have anything unique now but people still trust them to become bigger and better. Let us see. Time flies and we will know soon!

[Shresth_EV]

Originally Posted by nightraven

This is insane. Tesla itself isn't worth that humongous valuation and now this! This is truly bizarre and shows how wall street valuates companies for their own gains and greed. It's only a matter of time before competition catches up in the next 2-3 years with models like Mach E, F150 Lightning, Hummer, VW ID series already on sale and EV variants of mainstream models from BMW and MB on the way. When competition fully transitions to EVs one way or another in the coming decade (which they have to due to tightening ICE regulations), this bubble like many others will burst and I hope it wont cascade in to another bad recession.

People mistake Tesla for just being car brand and compare annual sales of Tesla with behemoths like VW/Toyota/Daimler, but truth is, they're more than a car brand.

They :
1. Sell stupid fast EVs with great range and tech features (Auto biz)

2. They have IP of the Autopilot and their own vehicle OS (of sorts?) with games, Netflix, Spotify and so on (Typical Si Valley software biz)

3. Solar and home inverter (powerwall biz)

4. Charging station network (soon becoming open to all EVs)

So if you look from that perspective, a typical car brand would be dabbling in far less businesses. Maybe making cars is their only biz and no side biz.

[V.Narayan]

Rivian has not sold a single car. A single car. And yet this 12-year old start-up is valued as the 3rd largest auto manufacturer in the world? Can they even be called an auto company yet. At 12-years are they still a start up.

Citigroup with its 200+ million customers and $72 billion in revenues and $23 billion in net income does not have this valuation. Let that last number sink in $23 billion of income after tax which is more than the 1.7 times the revenue of Infosys. And Rivian has a market capitalization greater than that. Sounds to my old ears its time to sell. Quantitative Easing in USA since the 2008 debacle and generally speaking monetary infusion by Govt's across the world has led to this situation of too much greedy money chasing too few asset targets. Hence these, IMHO, absurd valuations that are justifiable only by those who invested at already high valuations and need to talk the number up so that they can plonk the toupee onto some other even more aggressive investor.

My interactions and business dealings with PE firms led me to the conclusion that they are creatures of deal making not business making. A lot of this madness is prevalent in Indian markets too today with Unicorns with zero profits being born every week.

[Electromotive]

Originally Posted by Shresth_EV

People mistake Tesla for just being car brand...

You forgot to mention Tesla's biggest strength - they produce their own batteries.

The battery pack is the most expensive component in a BEV and having quality and price control of the battery makes Tesla unique in the EV space. Tesla has also bought a few battery companies to control the chemistry as well. VAG, Ford, Toyota and the other big boys are now setting up battery plants because without in-house battery production scaling up is going to be difficult.

Startups like Rivian and Lucid whom the markets are giving high valuations don't have battery manufacturing capability and thus can't scale or control cost as well as Tesla or the established manufacturers. Once the hype dies and the competition comes from VAG and Toyota, these valuations will drop off a cliff.

Tesla also designs its own silicon. Seems like they are using Apple's playbook and going for as much vertical integration as possible.

[Livnletcarsliv]

I look at this unbelievable valuation as nothing but another bubble similar to the real-estate bubble called the "EV Bubble".
I feel this valuation is artificial and intentional.

While I am definitely skeptical about this company and this IPO, I hope the financial markets and authorities are keeping track of these kinds of IPO's and launches.
We definitely don't want another 2008/2000's.

The only positive take from this is the progress and push towards green energy (especially EV's). In the long run, the mainstream auto companies will definitely take over bubbles like Rivian, Ola, Ather, etc.
Tesla is one exception - Why? - That's for another topic/thread though.

[NarulaAJ]

Hope this one doesn't turn into another Nikola! The company whose stocks also rise above Ford without making a single vehicle, yet turned out to be a scam.