Advances in Economics, Business and Management Research, volume 648

Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

Is Rivian the Next Tesla?

Jiaxuan Wen1,*
1
Department of Management and Finance, University of Toronto Scarborough, Toronto, M1H 3K2, Canada
*
Corresponding author. Email: [Link]@[Link]

ABSTRACT
Rivian, an American maker of electric pickups, went public on The Nasdaq on November 10, 2021, pricing at $78 and
raising $12 billion. The IPO rose 29.14% on its first day, with a market value of more than $80 billion, making it the
world's seventh largest automaker. A week later it overtook Volkswagen to become the world's third-largest carmaker,
with a market capitalisation of $151.9 billion. For a car company that has not yet begun to deliver on a large scale, this
is undoubtedly an exaggeration. Based on the listing experience of Rivian, this paper aims to expand and analyze how
electric vehicles have become the general trend, and what advantages and disadvantages they have compared with
traditional fuel vehicles. And Rivian, as the electric car company most likely to replicate Tesla's legendary experience,
has an advantage over other companies, and what its future should be.

Keywords: Rivian, Electric vehicles, Eco-innovation, Electric pickup truck

vehicles, emphasized the importance of finding new

1. INTRODUCTION
clean energy, and pointed out the trend of fuel cells
Climate change and resource shortages have made gradually replacing internal combustion engines. This
electric vehicles more and more popular. Kley et al. article also discusses the technical characteristics,
believe that although electric vehicles are expected to advantages and disadvantages of new energy batteries,
have greater market penetration in the future, there are and analyzes how to solve this for electric vehicles [4].
many stakeholders such as car manufacturers, battery Li pointed out that in the early stages of any product
manufacturers, and charging service providers. It takes market, mutual competition will be extremely fierce. In
time to make changes to cater to this trend. How to the past ten years or so, the electric vehicle market in the
consider various factors to determine the appropriate United States has increased tenfold, and policies such as
business model is crucial [1]. Rivian will make its first charging standards have gradually been unified.
delivery of EV pickups in autumn 2021. Laseter and Analyzing the data and information of the five years from
Sesia made comments to Adam Happel, head of 2011 to 2015, we can know that unified standards and
Consumer Energy Solutions for Rivian Electric Vehicles, mandatory policies can help reduce the cost of various
evaluated plans for Rician home charging stations and a facilities on the market and increase the market size [5].
public network of charging stations in the U.S. and Globally, the number and market share of electric
Canada. And analyzed and discussed Rivian's plan to vehicles are increasing, and China's electric vehicle
build a charging network in the future [2]. Electric market is particularly booming. However, Hertzke et al.
vehicles have become a significant technology to reduce found that for the automobile market, different market
emissions and pollution. Helmers and Marx focused on segments have different power preferences, regulatory
discussing the differences between vehicles using new policies, consumer preferences and adaptability of
energy technology in terms of energy saving and models. Only by taking into account more audience
transmission efficiency compared with traditional fuel groups, can electric vehicles achieve greater commercial
vehicles. The feasibility and significance of electric success [6].
vehicles are verified, and the attenuation efficiency of the Hausman has studied consumers' potential demand
battery is analyzed and discussed, and the key problems for electric vehicles through analysis of survey data,
of electric vehicles are pointed out [3]. regards electric vehicles as a new product from the
Wilberforce and El-Hassan and others discussed the perspective of economics and marketing, and analyzed
seriousness of the pollution problem of traditional fuel and predicted its future market. From the perspective of
consumers, it analyzes the problems that need to be

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solved for the popularization of electric vehicles [7]. Davenport produced the first electric car driven by direct
Sarah LaMonaca and Lisa Ryan described the current current (DC) in 1834, and the invention of a lead-acid
market status of electric vehicle charging device battery in 1859, makes the electric vehicle from the
infrastructure, analyzed current charging policies and experimental nature to the practical.
deployment scope, major manufacturers and providers in
In 1896, Hartford Electric Light company realized the
the market, and future policies and expansion plans. The
importance of promoting charging facilities and
solutions to these problems in order to achieve large-
promised that every car purchased from General Electric
scale electric vehicle deployment [8].
could use the equipment provided by Hartford Electric
Bilbeisi and Kesse conducted research on Tesla, the Light to change the electricity. The service, which began
largest electric vehicle company, discussed Tesla’s in 1910 and ran for 15 years, has helped electric vehicles
starting point and theoretical basis for creating electric drivers drive 9 million kilometers. To "change
vehicles, and analyzed environmental factors such as electricity" instead of "refueling", is the earliest civil car
political and economic success, as well as the "change station" in human history. In the following years,
development of electric vehicles. Compared with electric vehicles in Europe and the United States continue
traditional fuel vehicles, energy consumption and to mature and develop. In 1911, the New York Times
environmental protection have advantages and future used "perfect" to praise electric cars for being
market development prospects [9]. Sierzchula and environmentally friendly, quiet, and affordable to use. At
Bakker and others studied a series of policies introduced the beginning of the twentieth century, the market share
by governments in order to promote the popularization of of electric vehicles was significantly higher than that of
electric vehicles and analyzed the socio-economic factors gasoline vehicles. The early 20th century is the first
involved in these policies. Through modeling analysis, it development period of EV.
can be known that financial incentives and charging
But soon the EV development begins to decline, and
infrastructure are the two most critical factors affecting
it enters to the first recession period. As internal
the penetration rate of electric vehicles [10].
combustion engines became more efficient, gasoline-
powered cars gradually regained their market share. The
[Link] OF RIVIAN AND ELECTRIC advent of The Second World War accelerated the change
VEHICLES of the development speed of the two, and the experiment
of electric vehicles was gradually reduced. Because of the
2.1. The history of electric cars demand of the war, the characteristics of the fuel engine
at that time, such as high endurance, low cost, and
The 20th Century is the century when humans entered
convenient replenishment, were more in line with the
the industrialized society. The manufacturing industry is
needs of the war. And the money needed for the electric
the most significant industry of industrialization, which
car experiment was used for the war. In addition, the
affects the development process of the whole
combustion engine became the more cost-efficient
industrialization. Among them, the automobile industry
solution due to the improved access to oil which then
is the industry with the greatest impact on human life in
spurred mass production of this technology [1]. The
the 20th century.
improvement of oil extraction technology reduces the
The development of the automobile goes back to the cost of using oil dramatically.
18th. People often believe that the world’s first car is
Since the 1990s, people's environmental awareness
designed and produced by Karl Benz, in 1885/1886, Karl
has been improved, and people have gradually realized
Benz designed and built his four-stroke engine, and used
the shortage of oil. EV ushered in its second period of
it in his car, and successfully patented it in 1886, which
development. The research on electric vehicles has made
is regarded as the birth date of the automobile. It can be
rapid progress, and many difficulties have been
recognized as the Incubation period. However, this is
overcome. At present, the mainstream car enterprises
from the perspective of the Internal Combustion Engine
have begun to transform, electrification is the trend of the
Vehicles (ICEV), and the history of electric vehicles is
future, after the key issues of mileage and safety are
longer than ICEV. The world’s first motor vehicle was
solved, the market share of electric vehicles is gradually
the first electric car in 1834, half a century earlier than
rising. And its high energy efficiency, low emission
the world’s first internal combustion engine car in 1886.
pollution, and other advantages of traditional fuel cars
The development of electric cars can be roughly cannot be solved. By 2021, the EV marketplace was
divided into the following four stages: after Faraday growing more competitive with new entrants—both start-
discovered electromagnetic induction and invented the ups and venerable auto manufacturers—producing or
first generator in 1831, American mechanic Thomas planning to produce EVs [2].

Figure 1 The Development of EV

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with no less than 2.5 billion US dollars in January and

2.2. The necessity of electric cars
July 2021.
The pollution of the exhaust of cars is considered to For Amazon, Rivian has specially developed and
be the most critical environmental pollution. Car exhaust exclusively used electric delivery vans. In the first quarter
pollution is environmental pollution caused by of 2020, Amazon spent $11.5 billion on warehousing and
automobile exhaust gas. Automobile exhaust contains logistics, which is more than a quarter of its operating
hundreds of different compounds, among these costs. This will undoubtedly reduce amazon's heavy
compounds the main pollutants are hydrocarbons, warehousing and logistics burden. For Ford, investing in
nitrogen oxides, carbon monoxide, sulfur dioxide, lead Rivian is a crucial step in its transition to electrification.
compounds, benzopyrene, and solid particles. A car emits On November 10, 2021, Rivian was officially listed on
three times more harmful gases than its weight in a year. NASDAQ under the stock symbol RIVN. It plans to seek
As cars become more numerous and widely used, the an IPO with a market value of more than $65 billion and
negative effects that they produced on the environment finally closed with a market value of $85.9 billion on the
are also aggravating. first day, becoming the first IPO of 2021 so far and the
Automobile exhaust is mainly concentrated at a level sixth-largest IPO in the US stock history.
about 1 meter above the ground, which is near the
respiratory zone of people. It is extremely harmful to 3. COMPARASSION BETWEEN EV AND
human health, mainly reflected in the damage to human FUEL VEHICLES
cells, the reduction of human immunity, ease to cause
respiratory and cardiovascular diseases, and the greatest 3.1. Differences and advantages of electric cars
impact on children. compared with traditional cars
Carbon monoxide is the most concentrated pollutant
With fuel efficiency and environmental regulations
in vehicle emissions, which account for 75% of carbon
becoming increasingly stringent, car manufacturers have
monoxide in the atmosphere and are fairly stable, and
plans to add plug-in technology to most of the cars in
inhaling carbon monoxide deprives people of oxygen. At
their portfolio [5]. and the differences between electric
present, there are more than 600 million cars in the world,
vehicles and traditional fuel vehicles are mainly as
and they emit about 600 million tons of carbon
follows:
monoxide, 100 million tons of hydrocarbons, and 50
million tons of nitrogen oxides each year, accounting for (1) Different driving modes: Electric cars are driven
more than 60% of total air pollutants. The lower the by motors instead of traditional engines. As a result,
carbon impact accompanying the electricity production electric cars can exert maximum torque from the start,
in a country, the lower is the greenhouse gas emissions giving them a far greater speed advantage than petrol
of the BEV in operation [3]. cars. The rollout of more attractive, better-performing
EVs in key high-demand segments is another major
Improving the quality of gasoline is one of the most
driver for sales uptake, both in Europe and the United
effective ways to solve the pollution of the car exhaust.
States [6].
However, it can not eliminate that pollution and solve the
crisis thoroughly. An alternative power source recently (2) Chassis structure is simplified and modular. The
considered and still under intense investigation to replace clutch, transmission, differential, and other transmission
or complement the internal combustion engine in recent devices in traditional fuel cars are integrated and
times is Electricity [4]. replaced. But also because of batteries, electric cars are
generally heavier than gas-powered ones. And more mass
2.3. Rivian's brand history means more inertia, which is a challenge for a car's
braking system.
Rivian, founded in 2009, makes electric trucks and
SUVs in America. Founder and CEO RJ Scaringe grew (3) Differences in follow-up maintenance problems.
up obsessed with cars and graduated from college then Fuel vehicles cost more and need more frequent
work for the Mainstream Motors, a predecessor of maintenance, but the battery is facing the problem of
Rivian, where the company's main product was battery life. Petrol cars generally have far more
inexpensive sports cars. Rivian's r&d focus shifted to maintenance items than electric cars, which leads to
electric cars only in 2011, and it made a name for itself at higher short-term vehicle costs. However, from a long-
the 2018 Los Angeles Auto Show with two electric-only term perspective, when the battery is worn out, it costs a
models: the SUV R1S and the pickup R1T. Since 2018, lot to replace the battery of electric vehicles, which is also
along with the general trend of new energy vehicles, the reason the maintenance rate of electric vehicles is
Rivian has completed at least eight rounds of financing generally lower than that of fuel cars in the second-hand
with a total amount of more than 10.5 billion US dollars, car market.

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(4) Different energy needs, one is gasoline/diesel, the because it doesn't use the engine, it also has a full-width
other is electric energy, resulting in the difference in the Tunnel between the rear seats and the bucket, called the
convenience of refueling. Gas stations are now embedded Gear Tunnel. Users can opt for a full kitchen with cutlery
on roads around the world, and car charging stations, and stove.
while booming, are still relatively outnumbered.
Individuals do not seem receptive to electric cars that 4. DILEMMA AND COUNTERMEASURES
have limited range and long refueling periods [7]. Not to
mention that traditional gas-powered cars can carry 4.1. Problems faced by Rivian
gasoline with them, and it takes far longer to recharge
than to fill up. All told, petrol cars have less range anxiety In terms of delivery, Tesla has sold more than
than electric ones. 500,000 vehicles annually, but Rivian's delivery has not
started yet, and a large amount of capital is still needed.
3.2. Differences and advantages of Rivian In the first half of 2021, Rivian's net loss is $994 million.
compared with other traditional electric vehicle For Rivian, the listing is only the first step to catching up
enterprises with Tesla. In addition to profit and delivery problems
after listing, Rivian also faces a tight global supply chain
Rivian's popularity has something to do with its and a global chip shortage. In addition, Rivian's unique
product strategy. When it comes to the electric car product line could be a problem. Pickups are popular in
market, Tesla, Rivian's biggest competitor, has to be North America but remain a niche model in the global car
mentioned. To differentiate its product line from Tesla market, and Rivian competes with The Electric Ford
and avoid direct competition caused by product overlap, F150, in addition to Tesla's Cybertruck. General Motors'
Rivian mainly produces two-row passenger pickup trucks Hummer models and other traditional car companies
R1T and three-row SUV R1S. Rivian competes with launched electric pickup trucks.
Tesla not only by the difference of model but by the
development and manufacture of the upper and lower 4.2. The dilemma of electric pickup trucks
split of "body" and "chassis". This is completely different
from the way Tesla and other traditional car companies First, because the battery and motor provide
build electric cars. Rivian's skateboard chassis integrates instantaneous and powerful torque and enormous
electric motors, an all-wheel-drive system, batteries, horsepower, which is needed in a pickup truck, it can
steering mechanism, and suspension mechanism into this greatly improve the vehicle's off-road and
"skateboard", and its development and performance will maneuverability. On the other hand, the heavy and
not be affected by the body. It can greatly enhance the relatively harsh use environment of pickup trucks, heavy
convenience of manufacturing, reduce manufacturing batteries and motors will lead to a significant reduction
costs and shorten the research and development cycle; in the vehicle's range and accompanied by safety
Second, because there are no intrusive components such problems. Electric vehicles in the face of collision, water,
as engines, the skateboard chassis allows for more space high temperature, and other dangerous situations, often
in the upper cockpit, opening up the possibility of future more serious than the consequences of fuel vehicles. This
compatibility. What's more, Amazon, Rivian's largest is directly related to the battery installed at the bottom of
shareholder, just acquired Autonomous driving startup the electric car. When there is an object running through
ZOOX in 2021, so a future collaboration between the two the battery, the positive and negative poles of the battery
is highly likely. will be connected, and the battery will produce high
power discharge due to a short circuit, which will lead to
3.3. Differences and advantages of Electric sharp heat release. To reduce the charging time, the
charging power of electric vehicles will be set at a high
pickup trucks compared with electric other
level when they are in use. The power of many fast-
models charging piles is more than 100 kW, which will also bring
And Rivian's flagship model -R1T, as an electric safety risks. EV charging is also available at different
pickup truck, compared with the traditional electric sedan, speeds, costs, and locations and these must be tailored to
has stronger traction, better passability, and better load fit drivers’ needs [8].
capacity. This means that as a pickup truck that can carry
a lot of junk, it can drive quietly and quickly on the road, 4.3. The future of Rivian
and it has acceleration that traditional pickup trucks lack.
In fact, Rivian's eyes are not limited by the limitations
The Rivian R1T has a separate off-road drive mode that
of pickups. In a "Long-term Growth Strategy" filed with
allows the driver to improve the suspension and reduce
the SECURITIES and Exchange Commission (SEC),
throttle sensitivity to varying degrees. It's worth noting
Rivian lays out its crucial global plans for the future. It
that this electric pickup truck certainly has more storage
says that while its current product focus is on America
space than other electric cars, but compared to other
and Canada, But Rivian plans to enter the European
pickups, in addition to the extra storage space at the front

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market soon, and then the Asia-Pacific market. In order Energy policy, 39(6), 2010, 3392-3403.
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