Rivian (RIVN -12.34%) recently went public, and with a valuation above $100 billion, it's fair to say that investors are optimistic about its future. In this Fool Live video clip, recorded on Nov. 22, Fool.com contributors John Rosevear and Matt Frankel discuss Rivian's potential and whether its high valuation could be justified. 

Matt Frankel: Rivian has a $95 billion market cap. It has delivered a few dozen vehicles, period. Rivian is an electric vehicle maker, but they are specializing in heavier-duty applications, say pickup trucks and electric vans. They started production of their pickup truck in September. They've delivered a few, not a ton.

They raised a lot of money in an IPO recently, I think about $12 billion they raised at an IPO. But this is essentially a pre-revenue business, and you're buying it based on future orders and future potential. I like Tesla (TSLA -4.69%) better than Rivian right now, just because they have an actual proven business model and a proven ability to deliver. This was my No. 10 [out of 10 automotive stocks].

Rivian has over 55,000 pre-orders for its pickup truck, Amazon has committed to buy a 100,000 of its electric vans, but let's put those numbers in perspective. Those sounds like big, impressive numbers, and to some extent, they are. But Ford has a 160,000 reservations for its electrified F-150. The electric Transit van has already sold out. Some of the legacy automakers are putting up these numbers for electric pickups and things like that, and already have the capability of manufacturing and things like that. That's more proven than Rivian's.

Ford actually recently just canceled its plans to develop an electric vehicle jointly with Rivian. That's why the stock is down so much today, I believe. It's a pre-revenue company that's valued, like John said, like a full-grown BMW. I just can't wrap my head around it. John, you ranked this the highest out of the three. I'm sorry, we keep hunting to you, but you already auto expert. I know you ranked this the highest out of the three of us. I want to ask you, is there something I'm missing about the valuation that makes a little more sense?

John Rosevear: Well, here's the approach I took. You all call me the auto expert, I focus on auto stocks for the Fool. I've been looking at this large cohort of Upstart EV makers that have followed in the wake of Tesla. At this point, Tesla is a legacy upstart EV maker.  But within that group, I see Rivian, Lucid, and perhaps Fisker, and those are two more stocks we'll talk about in a bit as being among the better bets.

Rivian has very sharp management. They've gone about ramping up their manufacturing the right way. They've got expertise from Ford Motor Company. Ford had a seat on their board for a while and help them understand what was involved in manufacturing and how to scale their plant. They have a factory that used to belong in Mitsubishi years ago in Normal, Illinois, which is where they're building their vehicles now, and they do have real orders.

They do have backing from Amazon rather, is an investor, Ford is an investor. The CEO is sharp, likable, asks the right questions, hires good people and their model, the Rivian vehicles themselves, not the Amazon delivery trucks, but the Rivian vehicles themselves are Patagonia vehicles. They're upscale, they're priced somewhat high, $70,000-ish. It's a pickup truck, and SUV due shortly. I think next month they're going to start producing the SUV. They're built on the same architecture. It's just a different body style on top. The idea is that these refer outdoor enthusiasts and so on.

It's an interesting product niche. I think the company will not fall flat on its face. I ranked it somewhat high because there is a real business here, and I think they will be able to realize some of it. At the same time, your comment about 50,000, 55,000 not being a lot, let's put it this way. For today's internal combustion pickups, 55,000 is a slow month for Ford's F-Series.