Elon Musk says this is what it will take for Rivian to make it in the EV business

Elon Musk says this is what it will take for Rivian to make it in the EV business

“I hope they’re able to achieve high production & break-even cash flow. That is the true test.”

That was Tesla’s
TSLA,
-0.42%

chief executive officer Elon Musk, responding to a comment on Twitter
TWTR,
-0.67%

late Thursday over Rivian Automotive
RIVN,
+22.10%
,
which became the second-most valuable U.S. auto maker this week (No. 1 being Tesla, of course), after a blockbuster stock debut.

Rivian, backed by Amazon.com
AMZN,
-0.27%
,
Ford Motor
F,
+0.98%

and T. Rowe Price 
TROW,
+0.47%

funds, is hoping to dominate in the area of all-electric pickup trucks and SUVs. The company raised $11.9 billion in its initial public offering and shares rose another 17% on Thursday to $122.99 a share, after a 29% jump on its first day of trading Wednesday.

Musk was responding to an observation from Twitter user @samtwits who had this to say: “When $TSLA IPOed at a value of $1.7 billion they had been selling Roadster for 2 years & had stunned the world with Model S reveal the year before. No criticism of Rivian, but 24 hours into IPO MC is $100B with zero revenue. A sign of the times @elonmusk?”

In addition to his comment about high production, and cash flow, Musk added this: “There have been hundreds of automotive startups, both electric & combustion, but Tesla is only American car maker to reach high volume production & positive cash flow in past 100 years.”

Rivian has yet to make any money and the company has said it doesn’t expect to turn a profit in the “foreseeable future” as it keeps pouring money into its business. That didn’t stop investors from piling into the IPO this week.

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Tesla’s market capitalization recently topped $1 trillion, lifted by record third-quarter earnings and optimism over a yet-to-be-signed deal to provide rental-car group Hertz
HTZ,
+4.06%

with a fleet of electric cars. The company reported third-quarter operating cash flow of $1.3 billion, minus capital expenditures. Its cash and equivalents fell by $164 million to $16.1 billion in the period.

A 50% jump in shares of Tesla so far this year has driven Musk’s net wealth to nearly $300 billion, making him the wealthiest man in the world. Shares have dropped 12% this week over share selling by Musk, who has sold roughly $5 billion this week.

And: A ‘Made in America’ tax credit — what car buyers considering a Tesla, Rivian or other EVs need to know about Build Back Better

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