Shares of electric vehicle maker Rivian rose yet again Friday despite Tesla billionaire CEO Elon Musk pouring cold water on investors’ enthusiasm about the young company, saying it has yet to face its “true test.”
Rivian stock was up more than 4% to around $128 in early afternoon trading, building on its strong gains a day earlier, when it rose more than 22%.
On Wednesday, the electric vehicle maker went public at a $90 billion valuation in the biggest U.S. IPO since Facebook, with its stock price surging nearly 30% to around $100 on the first day of trading.
Tesla CEO Elon Musk on Thursday tweeted that Rivian’s “true test” would be achieving high production and break-even cash flow.
Though he wished the rival electric vehicle maker well, Musk also pointed out: “There have been hundreds of automotive startups, both electric and combustion, but Tesla is [the] only American carmaker to reach high volume production and positive cash flow in past 100 years.”
Rivian’s massive IPO stands in stark contrast to Tesla, the original electric vehicle disruptor, which went public in 2010 at a valuation of around $1.6 billion.
Tesla raised just over $200 million in its IPO, while Rivian raised nearly $12 billion earlier this week.
What To Watch For:
Rivian’s lofty valuation highlights the massive investor interest in electric vehicles: The company now has a market value of over $100 billion, despite having virtually no revenue yet. Rivian said in filings that it expects to lose as much as $1.28 billion this quarter, but it has a backlog of over 50,000 orders for its R1T and R1S vehicles, both of which go for a starting price of around $70,000.
Famed investor Michael Burry from The Big Short called out Elon Musk early on Friday morning, saying that the Tesla CEO wasn’t quite right with his comments on Rivian. Burry, who is CEO of Scion Asset Management, responded to Musk in a tweet saying that the “true test” is instead achieving high production and profitable cash flow “without massive government and electricity subsidies on the backs of taxpayers who don’t own your cars.”
Big Number: $2.2 Billion
That’s how much RJ Scaringe, who founded Rivian in 2009, is worth as of 1:30 p.m. ET, by Forbes’ estimates.
Rivian, which some investors hope could become the next Tesla, is the first company to release a fully electric pickup truck, the R1T, and plans to launch its electric SUV, the R1S, this December. Rivian is also expanding into commercial vehicles: Amazon, which has a 20% stake in Rivian, is its biggest customer and has already ordered 100,000 electric delivery vans.