Sponsored Why Tesla could be taking a back seat to new electric car maker
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Why Tesla could be taking a back seat to new electric car maker

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Elon Musk’s company Tesla has dominated the electric vehicle space since it went public in 2010, but now a rival is set to deliver some serious competition.

Rivian, a US company, has set itself apart from Tesla with its range of electric trucks.

The company has been around since 2009 after it was founded by California’s Robert ‘RJ’ Scaringe, who is worth an estimated $3.4 billion.

Rivian’s initial public offering (IPO) is scheduled for late 2021 and the company’s valuation is expected to be about $80 billion post-listing. Early investors include Ford Motors and Amazon.

Rivian will compete with not only Tesla, but other companies in the EV space including Lucid, Nikola and traditional automobile makers, including Ford, moving into the electric car market.

Traders and investors are likely to see more opportunities thanks to the revved-up competition, said Tony Sycamore, City Index market analyst.

“Due to its backers, there is a consensus that Rivian will become a genuine competitor of Tesla, both off and on the road,” he said.

“An example of the latter, the Rivian R1S, will deliver from 240 to 410 miles of driving between charges, compared to the 237 to 295 miles offered by the Tesla Model X.

“That said, based on the reported size of the Rivian IPO, the company will be priced for perfection with little wiggle room for the type of production delays that hampered the launch of Tesla’s first mass-market car, the Model 3.”

Rivian will compete with Tesla
Rivian will compete with not only Tesla, but other companies in the EV space including Lucid, Nikola, and traditional automobile makers, including Ford, moving into the electric car market.

A key early battle for the company could be in the results of how its R1T pickup performs against Tesla’s Cybertruck, which has attracted a lot of online attention.

This, along with the investment behind Rivian, could shape its early performance on the sharemarket, said Ben Lobel, City Index researcher.

“The company has raised in excess of $10 billion, the vast majority of that over the past two years, so it certainly has the backing, as well as the in-house expertise, to shake things up,” he said.

“Going on Tesla’s somewhat flat performance for several years after its 2010 listing, there may be a lull period as the company finds its feet in an ever-changing and complex sector.

“However, if the Tesla stock has shown anything in more recent times, it’s the ability to captivate market participants in a way few other industries can, so big early moves are certainly possible for this stock.”

Rivian cars are due to roll off the production line late this year.

The company will only offer two models initially, the R1T pickup truck, which starts around $US75,000, and the R1S SUV, $US70,000. The pre-order launch editions of the two vehicles sold out at the end of 2020.

The company has reported both vehicles have begun testing in Australia, but there is no available timing on its release here yet.

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