Is Rivian Ready to Take on Tesla?

While Tesla is still by far the biggest car manufacturer when it comes to market cap with a value of over $1 trillion, the incredibly successful IPO of EV maker Rivian this past Wednesday could spell trouble for Elon Musk and his business in the long run. With a current valuation of $99 billion, the company is the second-most valuable U.S. automaker behind Tesla, as our chart shows.

The manufacturer focusing exclusively on battery-powered electric SUVs and trucks originally priced its shares at $78 apiece on Tuesday night, with the share price rising to over $100 right before its NASDAQ debut. This is especially surprising considering the company has a lot on its plate in the near and distant future: The global chip shortage and supply chain disruptions have significantly delayed production at its Illinois factory, environmental activism groups are already imploring Rivian's leadership to engage with labor unions to set a positive example, and its CEO only expects revenue of roughly $1 million in the third quarter. That the market valuation of the automaker founded in 2009 rose to such heights against these odds is an indicator of an ongoing investment trend in EV technology, seen by many as one of the most viable ways to reduce emissions in the transportation sector. Rivian itself is financed in part by Amazon, which holds a 20 percent stake in the manufacturer and has already ordered 100,000 vehicles for its fleet by 2030, and competitor Ford with a company share of 12 percent.

Electric vehicles are not without their problems though: A possible lower shelf life of batteries compared to combustion engines, the reliance on scarce materials for its battery production and the question of waste disposal loom over the continued shift to clean up the automotive industry's act. At least when it comes to emissions, battery-powered electric vehicles are miles ahead of their diesel- and petrol-fueled counterparts, even when factoring in the production cycle. According to a study by the Institute for Energy and Environmental Research Heidelberg, EVs emitted 162 grams per kilometer driven, while cars with diesel- and petrol-powered engines showed emission numbers of 212 and 233 grams per kilometer driven, respectively.