Mad Money main man Jim Cramer isn’t quite ready to hop on the Rivian express heading into tomorrow’s initial public offering (IPO). Despite having some strong backers, Cramer believes the electric vehicle industry is “getting a little crowded.” But, with RIVN stock eying a $70 billion valuation, the industry might just have to make room.
Speaking of strong backers, just last month, former Amazon (NASDAQ:AMZN) CEO Jeff Bezos called Rivian’s founder, RJ Scaringe, “one of the greatest entrepreneurs I’ve ever met.” Amazon is famously supportive of the startup, owning a 20% stake. In September 2019, Amazon even signed a deal with Rivian for 100,000 electric delivery vans. Rivian is apparently preparing to deliver the first 10 by the end of the year.
Can RIVN Stock Justify Its Sky-High Valuation?
There is certainly plenty going for Rivian at the moment. It has accrued ample funding (with much, much more on the way), expanded its production capacity, and it has some of the biggest names in the world cheering it on. But, as seen with Nikola (NASDAQ:NKLA), having all the pieces doesn’t necessarily mean the puzzle’s finished.
Some doubt that Rivian has the production scalability to compete with long-time car manufacturers like General Motors (NYSE:GM) and Ford (NYSE:F), which are both pursuing EVs. Reasonably so. Compared to those titans, along with natural competitor Tesla (NASDAQ:TSLA), Rivian has some catching up to do. But it is getting some help along the way.
Included in the infrastructure bill that Congress passed last week were numerous provisions targeting EV expansion. As part of President Joe Biden’s goals for electrifying transportation, billions have been invested in the industry between charging stations and tax credits.
Cramer might be down on the company, but society remains steadfast in its commitment to an emission-free future; a future Rivian might well deliver.
On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.