Rivian, a manufacturer of electric vehicles, recently went public on the stock market and became one of the largest companies to IPO in 2019. While not every investor has taken a risk on this company in its current state, some people have studied as well as invested to date. With Rivian’s new hype and potential for growth, it makes sense that there is some investment following Rivian’s IPO.
1) They have a competitive advantage in the electric vehicle industry
The electric vehicle market is growing rapidly as traditional car companies such as BMW and Porsche try to compete with Tesla. However, Rivian has managed to be more competitive than its competitors thus far. The company has designed its platform, R1T, which is the basis for its electric vehicles. This allows Rivian to keep costs low and profits high by controlling the manufacturing process through all stages of development. A combination of this competitive advantage and future online sales will help Rivian grow in their home market as well as internationally.
2) They are targeting a niche market
Rivian’s niche is electric sport utility vehicles (SUVs). The company appears to be eyeing its competitors in the traditional car industry and gaining ground. For example, Rivian’s chief executive officer stated that they are interested in competing with BMW and Porsche in the electric vehicle market. The company is targeting a niche market rather than the entire market to ensure that it can control costs and keep margins high. This will allow Rivian to dominate its niche markets thus ensuring that it can continue to grow faster than competitors in the future.
3) They have a functional product
Rivian has designed and built a strategy for electric vehicles. This allows Rivian to turn a profit on their product as soon as it is manufactured, which in turn will allow the company to reinvest its profits and grow even faster in the future. In addition, the company’s R1T vehicle will appeal to those who are interested in environmental sustainability and the latest technology. As such, sales are expected to be high even before they enter the market.
Investors should not be scared by Rivian’s current position in the automotive industry. The company is expected to grow and at the very least maintain profitability for its investors even if they are not present in the market. This is due to their niche product, focus on profits, and continued involvement in the electric vehicle market through their R1T platform.