Here's How Tesla CEO Elon Musk Reacted To Rivian's Sky-High Valuation After IPO

Tesla Inc TSLA Chief Executive Officer Elon Musk said on Thursday the newly listed Rivian Automotive Inc’s RIVN sky-high valuation is yet to pass the real litmus test of “high production” and “breakeven cash flow.”

What Happened: Rivian has quickly passed the $100 billion valuation on the first day of trading and soared even higher on Thursday, in spite of it being at an early-stage of electric vehicle production.

Musk was responding to a Twitter post that compared Tesla’s $1.7 billion valuation and production on the day it went public in 2010 with that of Rivian’s. Tesla was already selling the Roadster for two years and had revealed the Model S months before the listing.

Rivian has so far produced 156 R1T electric trucks.

I hope they're able to achieve high production & breakeven cash flow. That is the true test.

There have been hundreds of automotive startups, both electric & combustion, but Tesla is only American carmaker to reach high volume production & positive cash flow in past 100 years.

— Elon Musk (@elonmusk) November 11, 2021

Musk said hundreds of automotive startups — electric and combustion — have tried to break the high production and positive cash flow in the past decade but only Tesla has been able to breach those targets.

See Also: Here's How Much Ford And Amazon Made On Rivian's Stock Debut

Why It Matters: Musk has been vocal about electric automakers securing high valuation after taking the SPAC route to get listed. In August, Musk said Rivian should have delivered at least one vehicle per billion of its valuation before its IPO. 

Last month, he took another shot at Rivian and Lucid Air Inc LCID saying "these are strange days" as companies that have not shipped any cars are able to secure valuations in billions of dollars.

Rivian is backed by legacy automaker Ford Motor Inc F and e-commerce giant Amazon.com Inc AMZN. It has scored a higher valuation than Ford and General Motors Co F. 

Rivian is aiming to build at least 1 million electric vehicles before 2030.

Rivian’s current market cap is $104.89 billion. GM and Ford have a market cap of $89.75 billion and $78 billion respectively. Tesla’s current market cap is just over $1 trillion.

Price Action: Rivian shares closed 22.10% higher at $122.99 a share on Thursday.

Photo: Courtesy of Nvidia Corp. via Flickr