Rivian is worth more than Volkswagen. Because?

There is something wrong, or most of the parameters on which the world is based are completely wrong. Let's look at the Rivian case, the new EV automaker that raised $ 11.9 billion on its debut. how much is Rivian worth now?

It is worth 146 billion theoretical dollars, according to the current exchange rate.

Let's make a comparison: how much is VW worth?

It is worth 121 billion euros, equal to just over 136 billion dollars.

So Rivian, which has orders for 50,000 cars, has built less than 60 so far, has no production, distribution and sales facilities, is worth more than an established car manufacturer that sold over 9 million cars in 2020.

In theory, the markets look to the future, to the potential for growth. Could they have been so wrong? Let's do some reasoning:

• the car distribution network is an authentic pachyderm of the first half of the twentieth century, with the system of dealers, sub-dealers, area managers, etc. VW is the pachyderm of the pachyderm, with an incredibly bulky and expensive structure. Rivian and Amazon and will certainly have a much simpler and less expensive distribution system;
• VW is conducting a costly conversion to electric car production, with sunk costs deriving precisely from its dual "German Model" with union participation in control. Rivian is a blank slate on which to build almost everything. Even though it already has factories in Michigan, Illinois, California and a base in the UK, everything else starts from scratch.

However Rivian has built fewer than 60 cars and has to build a worldwide network, which also covers Europe and Asia, which at the moment does not exist at all. So it seems a bit unlikely that the American house will be worth that much. Attention: this does not mean that the value can increase further, even if driven by enthusiasm, which however is a dangerous factor when it comes to investments. Then both will have to face the big problems deriving from the electricity sector still full of unknowns and bottlenecks, especially for the supply of the few essential components.

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The Rivian article is worth more than Volkswagen. Because? comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/rivian-vale-piu-di-volkswagen-perche/ on Wed, 17 Nov 2021 11:00:43 +0000.