The Rivian name is seen on certainly one of their latest electric SUVs in San Diego, USA, December 16, 2022.
Mike Blake | Reuters
Rivian Automotive plans to raise $1.3 billion in money through the sale of convertible bonds, joining a growing list of electric vehicle makers trying to hoard money as demand falters.
Rivian’s shares closed up greater than 14% on Tuesday.
Rivian said plans to sell convertible bonds – bonds that might be redeemed in money, shares or a combination of the 2 – on late Monday to assist fund the event and launch of its upcoming smaller series of R2 vehicles, currently expected in 2026. Investors buying bonds will have the choice to buy additional as much as $200 million price of notes in the event that they so select, above the initial $1.3 billion.
Rivian just isn’t in urgent need of money, a minimum of not yet. The electric vehicle maker had $12.1 billion at the tip of 2022, it said during its fourth-quarter earnings presentation Feb. 28, enough to fund its operations until 2025. But recently it has made a series of cash-saving moves, releasing 6% of its strength working day and postpone the discharge of R2 by a 12 months.
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Rivian also said last week that it expects to provide 50,000 vehicles in 2023, down from the roughly 60,000 that Wall Street analysts had expected. This will likely mean that the demand for expensive pickups and SUVs just isn’t meeting expectations.
Transparentone other start-up that makes expensive electric vehicles has also led investors to lower-than-expected production in 2023 and said it plans to ramp up marketing in the approaching months, suggesting it is also getting fewer orders than expected.
Rivian raised nearly $12 billion when it went public in late 2021, helping amass a hoard of money that also surpasses most other EV startups. Nevertheless, the corporate’s shares have lost over 80% of their value since their debut.
Rivian said the convertible bonds would qualify as “green bonds,” meaning they meet a set of criteria that typically attract institutions willing to just accept lower returns in exchange for supporting sustainability.
The maturity date of the bonds is March 2029. The rate of interest and other conditions will be determined in the course of the valuation of the offer.