Rivian details $1B loss, Amazon deal terms in IPO filing; in-house battery plan disclosed

Rivian Automotive Inc., the maker of EVs backed by Amazon.com Inc., disclosed a net loss of almost $1 billion in the first half of the year in its initial public offering paperwork.

The Irvine, Calif.-based startup in a filing Friday with the U.S. Securities and Exchange Commission listed the size of the offering as $100 million, a placeholder that will change when terms of the share sale are set.

Rivian was seeking to be valued at about $80 billion in a listing, Bloomberg News reported in August when the company announced that it had filed confidentially for an IPO.

The company’s IPO plans come as EV makers are scaling up, angling for a bigger slice of the growing market. With $10.5 billion raised from backers including Amazon and Ford Motor Co., an established factory in Illinois and thousands of reservation holders for its R1T truck and R1S SUV, Rivian is among the most serious competitors lining up to take on electric-vehicle leader Tesla Inc.
 

The filing revealed new details about Rivian’s pact with Amazon, underscoring how the startup has tied its future to one of its biggest benefactors. The e-commerce giant will have exclusive rights to Rivian’s delivery vehicles for four years after receiving its first one, and it gets right of first refusal to buy the vans for two years after that. Amazon has ordered 100,000 last mile trucks by 2030, with the first 10,000 due this year.

But the filing shows that Amazon’s logistics unit isn’t bound to buy any electric delivery vehicles from Rivian -- and that it can still work with any other potential automotive partners.

“While the EDV Agreement provides that we will be reimbursed for certain development costs, it does not include any minimum purchase requirements or otherwise restrict Logistics from developing vehicles or collaborating with, or purchasing similar vehicles from, third parties,” it said.

Rivian also disclosed how many of its SUVs and trucks have been pre-ordered. Potential customers have put down a refundable $1,000 deposit for non-binding rights to buy 48,390 R1T and R1S models.

$3.7 billion war chest

Rivian posted a net loss of $994 million in the first six months of 2021, compared with a $377 million deficit a year earlier, according to the filing. The company generates minimal revenue from the initial sales of its R1T, commercial pick-up truck, vehicles and does not generate any revenue from the sales of other products. It had about $3.7 billion in cash and cash equivalents on hand as of June 30 to fund its growth.  

The company’s other investors include T. Rowe Price Group Inc., Global Oryx Co. and Manheim Investments, the filing showed.

“Rivian exists to create products and services that help our planet transition to carbon neutral energy and transportation,” CEO Robert Scaringe wrote in a letter to prospective investors. “I hope you’ll join us in our journey to help drive the future of transportation.”

The startup disclosed that as of this week, it operated six service centers in four states, including California, Illinois and New York, in addition to a 24/7 service support center in Michigan and 11 mobile service vehicles. Rivian had a network of 169 dedicated charging stations across the country, 24 of which are so-called fast charging sites.  

The offering is being led by Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. More than 20 banks are listed on the cover page of its prospectus. The company plans to trade its shares on the Nasdaq under the symbol RIVN.

Rivian employs about 8,000 people globally. It’s main factory in Normal, Ill., is a former Mitsubishi Motors Corp. plant where production on the company’s debut consumer model just started.

Battery cells in-house

In another disclosure, Rivian -- which currently sources batteries from South Korean supplier Samsung SDI -- said it plans to build battery cells in-house.

The company said in the filing that its own battery cells would "complement third-party cell procurement which will provide supply continuity and support our anticipated growth."

Rivian said it sees capital expenditure of about $8 billion through the end of 2023 to invest in additional manufacturing capacity, battery cell production, charging networks and others.

"Given the paramount importance and impact of the battery system on vehicle range, performance, and price, we have built in-house capabilities across the entire value chain," Rivian said, adding that includes battery cell development, battery manufacturing expertise and critical raw materials sourcing.

"Over time, we intend to expand our capabilities related to proprietary cell development and in-house cell manufacturing and expect that these functions will grow substantially in the coming years," it said.

Rivian announced in April that it had selected Samsung SDI as a battery supplier for its R1T pickup and R1S sport utility vehicle.

Samsung SDI is considering building a battery plant in central Illinois where a Rivian factory is located, U.S. Sen. Dick Durbin, D-Ill., told reporters in August.

Reuters reported in July that Rivian plans to build a second U.S. assembly plant that will also include battery cell production, citing people familiar with the matter.

Separately, Rivian said Friday it had established a philanthropy called Forever to address climate change and committed to investing 1 percent of its equity into the non-profit.