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  /  News   /  : 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.

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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