Shares in electric truck maker Rivian leap 37% on opening

Shares in electric vehicle firm Rivian soared when they started trading on Wednesday, boosting the market value of the firm to nearly $93bn (£69.2bn).

Shares leapt almost 37% after Rivian began trading on the Nasdaq.

As a result, the start-up, which is developing electric vans, pick-ups and SUVs, is now the second most valuable carmaker in the US after Tesla.

Yet Rivian only started delivering its first electric pick-up trucks to customers in September.

And the California-based start-up has made losses of over $2bn over the last two years.

The van and truck maker has drawn significant investor interest, in part because it already has the backing of online giant Amazon.

On Tuesday it raised more than $11.9bn from investors, who bought shares priced at $78 each, well above the range the firm had hoped for.

The flotation ranks among the top 10 initial public offerings (IPOs) of all time in the US.

Rivian is already being compared to Elon Musk's Tesla, which transformed the market for electric cars.

The company has beaten rivals include Ford and General Motors to design and produce a pick-up truck and is due to start rolling out its sports utility vehicle (SUV) in December and a delivery van in 2023.

It's a segment of the market popular with Americans but considered challenging to decarbonise.

"Rivian exists to create products and services that help our planet transition to carbon neutral energy and transportation," said RJ Scaringe, the company's founder and chief executive, in the firm's submission to the Securities and Exchange Commission (SEC), ahead of the share flotation.

"This is what inspired me to start Rivian, and it's what drives every decision we make as an organisation."

The firm was founded in 2009 as Mainstream Motors, changing in 2011 to Rivian, a name derived from "Indian River".

Originally Mr Scaringe pursued the idea of an electric sports car but later changed track to focus on trucks and vans.

Recently Rivian has invested heavily in production of the R1T which is designed as an aspirational, outdoor adventure style vehicle. It comes with the option of a three person tent roof attachment and a slide-out kitchen unit for cooking in the wild.

But crucial to investors' interest is the firm's relationship with Amazon, which not only owns 20% of Rivian, but has also said it will buy 100,000 electric delivery vans from the firm, once the firm starts to roll them out too.

Not so long ago, US investors didn't have that much time for electric vehicles. But things have changed - and how!

When Tesla went public in 2009, its shares were priced at $17 apiece, giving the company a total value of $1.5bn.

Today, the share price stands at well over $1,000, and the value of the company at more than $1tn.

That may explain at least some of the hype surrounding Rivian. EV businesses are simply hot property these days.

Factor in powerful backing from Ford and Amazon, pickup trucks that look all-American, even if they run on batteries, with commercial vehicles as well, and you can see why the IPO has gathered such momentum.

Rivian is not Tesla. Its products are very different, and deliberately so. But investors are clearly betting on the company one day becoming every bit as disruptive.

Ford has also invested in the firm, as well as working on its own electric trucks.

Karl Brauer at ISeeCars.com said there was a lot of excitement around the brand because of the backing it has already secured, and because it presents itself as a premium truck brand.

"It's not all about it being an electric vehicle. It's about it being an extremely effective truck that's powered by electricity," he said.

"I think people have a lot of anticipation, because they do feel like there's shades of Tesla here," he said.

However he said Rivian's fortunes could be undermined by an economic downturn reducing demand, or by mechanical or production difficulties.

There is already another cloud on Rivian's horizon. Its former vice president of sales and marketing, Laura Schwab is suing the company claiming she was was wrongfully dismissed after making a gender discrimination complaint about the "toxic bro" culture at the company.

She also says she warned the company its delivery targets were "not achievable".