[News Inside] Amazon's Pick for the Second Tesla... Will It Surpass Musk?

R.J. Scearce, CEO of Rivian

▲Founder of electric truck startup Rivian, R.J. Scaringe

[Asia Economy Reporter Kwon Jae-hee] 'The company chosen by Amazon' 'The second Tesla'

This is the story of Rivian, an electric truck startup that quickly rose to 3rd place among global automobile companies by market capitalization despite having '0 dollars' in sales.

Rivian was founded in 2009 by R.J. Scaringe. Scaringe was born in 1983 in Florida, USA. He was known as a car enthusiast from a young age. During his school days, he played by assembling his neighbor's Porsche, and from the age of 18, he nurtured a dream of establishing an automobile company. Having had a clear dream about cars since childhood, he graduated from the prestigious private university Rensselaer Polytechnic Institute in the U.S. and earned a Ph.D. from the Sloan Automotive Laboratory at the Massachusetts Institute of Technology (MIT), famous for its automotive research.

As he steadily pursued his dream step by step, Scaringe one day decided to develop eco-friendly cars because he realized that automobiles were a major cause of environmental pollution.

Thus, in 2009, he founded Mainstream Motors, an electric vehicle development company, which is the predecessor of today's Rivian. Initially, the company focused on developing electric sports cars, but after Tesla introduced its electric sports car Roadster in 2008, Rivian changed its strategy. In 2011, the company changed its name to Rivian and began targeting the electric truck market.

[Image source=Yonhap News]

In 2018, Scaringe first unveiled Rivian's electric SUV prototype at the LA Auto Show. It took about 10 years from the company's founding to showcase the prototype. However, as soon as the prototype was revealed, it attracted attention from many companies. Amazon was one of them. In 2019, Amazon decided to invest $700 million in Rivian. Amazon founder Jeff Bezos showed great interest, even visiting the factory in person in 2018 to meet Scaringe. Bezos selected Rivian vehicles for Amazon Prime delivery service and pre-ordered 100,000 Rivian vehicles. Following this, companies and investors such as BlackRock, Soros Fund, Ford, and Fidelity lined up to invest in Rivian.

Rivian debuted on Nasdaq on the 10th (local time) and steadily rose after listing, surging 15.16% in a single day on the 16th. As a result, its market capitalization surpassed $140 billion, overtaking Volkswagen, the largest automobile company in Europe.

Bloomberg News commented, "The electric vehicle craze has pushed Rivian's market cap beyond Volkswagen's," and "Rivian has become the largest U.S. company with zero sales."

However, some critics argue that the stock price is overvalued based solely on expectations for the electric vehicle market without visible performance.

Rivian only began customer deliveries of its first electric pickup truck, the ‘R1T,’ in September, so official sales have not yet been recorded. On the other hand, due to development and production costs, it posted an operating loss of $991 million (about 1 trillion KRW) in the first half of this year. The cumulative loss since last year amounts to $2 billion (about 2.36 trillion KRW).

Meanwhile, Scaringe holds 17.6 million shares of Rivian stock. With the stock price hovering around $128, the valuation of his shares reaches $2.2 billion (about 2.6 trillion KRW).

He has also been granted stock options for 20.4 million shares based on performance. If the stock price rises in the future, he could significantly increase his wealth for the first time.

This content was produced with the assistance of AI translation services.