Electric-vehicle maker Rivian, with a single manufacturing plant in Normal, is seeking to be valued at more than $50 billion.
That would make it about as valuable as Honda.
Illinois lawmakers were wise last week to pass a package of tax credits and business incentives to retain existing electric-vehicle production facilities and to help lure new ones, including vehicle parts and battery manufacturing plants.
The Legislature may have been just a step ahead of major institutional investors who will be lining up later this month to buy 135 million shares of common stock in Rivian, the electric truck and sport utility vehicle maker which has its only production plant in nearby Normal.
The stock sale likely will raise more than $8 billion, giving Rivian a valuation of about $60 billion. That’s in the same financial heights as Honda and not much less than Ford and General Motors.
Rivian, which was founded in 2009 but didn’t produce a vehicle until about a month ago, has lost more than $2 billion so far, emphasizing the enormous costs of starting a new company in the global automobile industry.
The company is slowly assembling vehicles out of its Normal plant at a rate of about four per day. But by the end of the year, the company says, it hopes to have produced more than 1,000 vehicles.
Most of the electric pickup trucks have gone to Rivian employees, which is why you’re more likely to see Rivian products in central Illinois than anywhere else in the world. The Normal plant, located in a 30-year-old former Mitsubishi Motors factory, employs about 3,100 people.
It won’t be until 2024, Rivian said, that it will be at full capacity at its Normal facility, producing about 150,000 trucks, vans and sport utility vehicles annually. The company has promised to deliver up to 100,000 electric delivery vans to Amazon by 2025.
Although Rivian appears to have strong auto industry bloodlines and financial support from backers, including Ford, Amazon and T. Rowe Price, it’s far from a sure bet.
“We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity and ramp up operations,” Rivian said in a Securities and Exchange Commission filing last month, “and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”
Tesla, it’s been noted, has lost billions of dollars between its founding in 2003 and its first profitable year in 2020.
These are fearsome times for any industry, let alone a new electric-vehicle manufacturing firm coming of age during a pandemic with troublesome global supply-chain issues. But Rivian appears to have made all the right moves so far, and its success will be central Illinois’ success. Illinois lawmakers made a sound investment last week with their offer of incentives and tax credits to the electric vehicle industry.