Electric truck maker Rivian soared in its debut on Wall Street on Wednesday, making the company, which has produced very few vehicles so far, already worth more than traditional automakers Ford and General Motors.
Shares in the company backed by Amazon and Ford leapt 50 percent in its first trades to $119.45 before easing back, taking its market capitalization to more than $100 billion, if stock options and other convertible shares are taken into account -- well above Detroit's legacy manufacturers.
Rivian announced late Tuesday that it had raised $11.9 billion in its initial public offering, setting the share price at $78, in the largest IPO since 2014 when China's online giant Alibaba went public.
The red-hot startup is taking advantage of investor enthusiasm for the electric vehicle (EV) sector, where star performer Tesla recently surpassed $1 trillion market capitalization.
Rivian was founded in 2009 by Robert Scaringe, a car enthusiast who, after graduating from college, wanted to focus on less polluting forms of transportation rather than the traditional automobile.
Backers view it as the next Tesla but it has sceptics as well.
"No one is even bothering to discuss unimportant issues like revenue or cash flow preferring instead to rely on the 'dreams' that are being sold by the management and its advisors," said Richard Windsor of Radio Free Mobile.
He attributes the rapid rise to investors with excess looking for promising returns.
"With no sales in the market, the Rivian team is also untested at the hardest task of all which is achieving scale, and Rivian needs to do this in spades if it ever hopes to grow into the valuation currently being attributed to it."
The company as of October 31 had delivered just 156 vehicles, mostly to company employees.
It delivered its first pickup, the R1T, in September, with plans to debut its R1S sport utility vehicle in December.
As of late October, it had an order backlog of 55,400 R1Ts and R1Ss that it expects to deliver by the end of 2023. Prices for the electric trucks and SUVs start from around $70,000.
Rivian also plans to deliver 100,000 vans to Amazon by 2030. The e-commerce giant has a stake of $3.8 billion in Rivian's preferable stock.
The Detroit automakers however are not neglecting the sector, with Ford building four new plants to produce electric vehicles and batteries that will create 11,000 new jobs by 2025.