Could Rivian Get Acquired in 2022?

Rivian (RIVN 0.08%) made an explosive market debut at the end of 2021, raising $11.9 billion in an IPO that was the world's largest last year. But concerns about the future of the company and its ability to maintain production capacity have dampened the enthusiasm of some investors. Is it possible that the newly public electric vehicle company could become an acquisition target? In this segment of Backstage Pass, recorded on Jan. 14, Fool contributors Connor Allen, Rachel Warren, and Toby Bordelon discuss that.

Connor Allen: Well, I'll continue with what Rachel was saying. I'll go backwards here. The company that I think could potentially get acquired would also be Rivian (RIVN 0.08%). I think the reason for that is that they're so highly valued right now, and a majority of that is based off that Amazon partnership that they have right now, that contract with Amazon. Because in the EV market, like what you were saying earlier, Toby, about the trucks getting delayed, there's so many delays. It's incredible.

It's happened with Tesla for all of the time that I have followed the company. There's always so many delays. So I can see something happening with Rivian where the stock price gets cut in a major way and it just gets acquired by somebody, perhaps even Amazon. I think Amazon owns 20% of the business already, if I'm not mistaken. I may be wrong, but I think it's close to 20%. That would be my company that could potentially be sold for its scrap, I guess.

But then the truck that I'm most looking forward to coming out is definitely got to be the Tesla Cybertruck. I think it's fascinating. It's really cool. I've watched some videos on it and spent some time on YouTube digging into the Cybertruck. I will say one thing about electric trucks in general: I drive a truck, but I don't think I will get an EV truck until the range is much higher than it is right now. And that's because of towing capacity, in that, if you get 400 miles of range with a truck, or say 500 miles -- say you're towing a boat, that range immediately gets cut in half, if not more.

I think that's how a lot of people are. That's part of the reason why they own a truck -- so they have the ability to tow things. So until EVs get that range up in that 700-, 800-mile mark, I think that might be something to think about before you would go and purchase an EV truck.

Now, if you just buy a truck to drive around like your regular car, then yeah, I can see you getting one. But that's one thing for me. Personally, I would love to own an EV truck, but that will be something maybe later down the road when the technology gets a little bit better.

That's one thing about EVs in general, is it seems like the technology is getting so much better every single year. It's like, when do you actually buy in? When do you get an EV? Because the next year, they might come out with something ...

Rachel Warren: That's even better. [laughs]

Allen: Yes, that you really wish you had. I guess that's the way it's been with cars for a long time. But especially with battery technology, I think that's the primary thing, because every gas-powered car has the same gas tank. Sure, it might get better miles to the gallon, but when you're talking about battery technology that can enable you to drive 100 more miles than the battery you currently have, you might want to wait until that other year.

But that's just a small rant about EVs, because I do want one in the future at some point. I guess that concludes all of the questions. There was quite a few there.

Toby Bordelon: Thank you. Yeah, there were. That was a big grab bag there. Thanks for those thoughts, Connor. I do agree with you on range. I think that's a big issue for the truck market, not so much maybe for local use, even if you're using it heavily. I'll tell you, the truck I'm excited about is the F-150 Lightning, which I think we should have that this year, and which Ford has increased production -- they're doubling production capacity, just because of the demand they're seeing for that.

But if you talk about something like this, that could be an interesting truck for the construction market, the trades market. If you're going from home to job site in your local area, and you have the ability to charge at both ends, range is much less of an issue. Especially if you're only going a short distance and you're going to be parking it, but you're using it to, say, power electric tools or something. There's a nice use case there.

But if you're talking about, "I'm taking my truck and I'm going to haul my RV across the country," range is a huge issue for that. We start to get into cool things like, OK, so could RV makers start installing solar panels on the top or battery packs in RVs that you could charge separately and then link up to the car to increase it? That's a possibility too.

I think we're going to see, as the trucks start to come out -- because the truck market is one market where there is a lot of infrastructure for aftermarket products. So I think when we start getting a critical mass of electric trucks, you're going to start to see that market adapt to optimize their offerings for the electric versions, to the extent that that might make sense. That will be interesting to watch.

Both of you mentioned Rivian. I have concerns about them as a company.

Warren: Are we being too tough? [laughs]

Bordelon: No, I don't think you are. The valuation seems really, high for the amount of product they're actually putting out into the market right now, which is not almost zero, let's say.

So that's a potential issue. Realistically, ask yourself: Who do you honestly think makes more [electric] trucks in 2022? We know it's not going to be GM because they've said 2023 is what they're targeting, the Chevy Silverado.

We have a pretty good indication it's not going to be Tesla, at least not at scale, although we're going to get a lot more information, hopefully, in a couple of weeks when they give us a product roadmap. They're supposed to update us on that. So really looking forward to that.

But if you say, between Ford and Rivian, which one of them do you think makes more trucks in 2022? Personally, I think the answer is probably Ford. They've got the factories. They're ready to go, right?

Warren: Yeah. I just read that Rivian has just produced so far about 1,000 electric vehicles. I think that's the number it just hit. Of course, all those parts, it's very complicated in this environment, too.

Bordelon: Yeah, it's quite complicated. But then you look at Tesla, which gave us 300,000, I believe it was in the last quarter, right?

Warren: Right.

Bordelon: Rivian's doing something that's a little different, they're doing this truck and this SUV, but still, [laughs] they got a long way to go to catch up. I think both GM and Ford probably produced more electric vehicles in 2021 than Rivian has put out. Not trucks, but again, they have other products out there that they're making right now.

Interesting market to follow. I wonder about this Bollinger thing too. Maybe they can make a go of it with the vans.

But again, there are other companies already delivering commercial delivery vans, electric vans, right now, that I think Amazon's got a bunch that they're accepting. That's a tough market, too. I wish them the best. We'll see if they can make a go of it, but, it wasn't great news, they're delaying these things and trying to pivot to something else.