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Stocktake: Electric car bubble is getting bubblier

It took Tesla 10 years to hit $100 billion but Rivian managed it in three days

When Tesla’s market valuation first topped $100 billion in January 2020, the company reported quarterly revenue of $7.4 billion. Photograph: iStock

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Proinsias O'Mahony
Tue Nov 23 2021 - 05:00

It’s not easy to make Tesla, a trillion-dollar stock trading on 350 times earnings, look cheap. Nevertheless, fellow electric vehicle outfits Rivian and Lucid Motors are doing their damndest to do just that.

Electric-truck start-up Rivian more than doubled barely a week after its November 10th initial public offering (IPO), driving its market capitalisation above $150 billion (€133 billion) – not bad for a company with no revenue. Rivian was worth more than Volkswagen at last week’s peak; in fact, it was worth more than almost 90 per cent of S&P 500 companies, according to Bloomberg data.

Meanwhile, luxury electric vehicle maker Lucid’s valuation topped $90 billion – almost as much as General Motors and more than Ford, a company whose shares have more than doubled over the past year.

Not long ago, sceptics complained about low-revenue Tesla’s multibillion dollar valuation. The recent action in Rivian and Lucid make such complaints seem “laughable”, says Bespoke Investment.

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It took Tesla 10 years from its 2010 IPO to hit $100 billion in market capitalisation, says Bespoke, but Rivian managed it in three days. When Tesla’s market valuation first topped $100 billion in January 2020, the company had reported quarterly revenues of $7.4 billion. Rivian and Lucid, in contrast, “are still considered ‘pre-revenue’ companies”.

What can you say? The electric vehicle bubble is getting bubblier.

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