Rivian's IPO filing is really a study in the shift to electric vehicles. Rivian Automotive, electric vehicle maker backed by Amazon and Ford, filed for an initial public offering on the Nasdaq.

Starting a new car manufacturing company is really hard, and while Lucid and Rivian are well funded, it will be difficult for them even to compete at home with Tesla, GM, Ford and others. It's just a massive gamble. Its paperwork shows Rivian had a $994 million net loss on zero revenue in the first six months of 2021.

They will build a super factory in Texas. In September 2021, Rivian beat Tesla, GM and Ford to the market with an electric pickup, the R1-T, which has received glowing early reviews.

After months of delay, Rivian has produced the first vehicle it deems good enough to actually sell. Although how is the company valuating itself at $80 Billion, it sounds a bit all too much.  In 2020 the company's net loss came to $1.02 billion. You cannot burn money at this rate, no matter how successful you think you will become.

A Company Without Sales Claims its worth $80 Billion

The company wrote in its filing, "We are a development stage company and have not generated material revenue to date. Vehicle production and deliveries began in September 2021. They have rushed to market and that's just really really expensive. It's nothing compared to the dozens of companies in China (actually hundreds) who will consolidate and hit the EV market with a global push.

In an Instagram post on Sept. 14, company founder RJ Scaringe announced that the company's first "customer vehicle," an R1T electric pickup truck, has driven off the production line in Normal, Ill. That's good news, I guess?

CEO RJ Scaringe, who has a Ph.D. from the Sloan Automotive Laboratory at the Massachusetts Institute of Technology, founded Rivian in 2009. While Amazon is a good backer to have, it might have to acquire this company at a discount to save it in the end.

After multiple production delays—the coronavirus pandemic, the semiconductor shortage, and the essential fact that Rivian had never made any production vehicles. How do you go to market in the middle of these events? It's just very challenging while companies like GM and Ford can put $Billions into EV pivot without the need for the same kind of marketing and manufacturing push. Yes Rivian's cars are good looking, but how can it compete with bigger companies like Tesla and GM?

Only Amazon can Save Rivian in the Long-Term

Rivian is among the most serious competitors lining up to take on electric-vehicle leader Tesla Inc. But let's face it, not many companies in the U.S. are even that serious or well funded. It's certainly not an $80 billion company in any figment of reality. This kind of IPO valuation really is dangerous for investors. It's not putting share holders first.

The only way this ends is Amazon taking over the company when it gets into trouble, which it will. Amazon and Ford each own more than 5% of the company. Peter Krawiec, Amazon's senior vice president of worldwide corporate and business development, sits on Rivian's board. Amazon will want its own EV and logistics company, and this has to be what they will aim for.

Investing in a Lithium ETF like $LIT makes more sense than picking individual names in the EV space, which is high-risk. Demand for Lithium goes up no matter what with ambitions targets from countries to be climate zero by 2030 or 2035.

Let's face it, sugar-coated IPOs can make you a bit sick as an investor. Rivian's commercial vehicle business will be highly dependent on Amazon for the foreseeable future. The company said Amazon has some exclusive rights to purchase electric delivery vehicles from Rivian for at least four years, and the right of first refusal after that.

Amazon's entire EV logistics fleet could come from Rivian. The electric vehicles that Rivian is building for Amazon include 3 different sizes, 500, 700 and 900 cubic feet. The smaller two are planned for launch in December this year, and early 2022. The larger one will follow at an unspecified date.

The company's other investors include T. Rowe Price Group Inc., Global Oryx Co. and Manheim Investments, the filing showed. This is not a list that gives much assurance. Rivian is a gamble in the EV space if there ever was one, global markets will be extremely intense with European and Chinese brands likely to encroach on the U.S. market. Maybe 90% of U.S. EV makers will fail or consolidate in even the first five years, that's how hard it's going to be. Even Tesla is likely in for a rude awakening after the equity bubble that QE led to.

 First-hand critical accounts of the $67,500 R1T are expected to appear by the end of this month. Rivian is a cool attempt don't get me wrong but it's worse than a risky investment, it's suicide. Over 20 banks are listed on the cover page of its prospectus. The company plans for its shares to trade on the the Nasdaq under the symbol RIVN. Proceed with extreme caution, let the stock go down to realistic levels before placing any bets.

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