Rivian’s Forever Fund Will Turn Nature into an EV Shareholder

The electric-vehicle company is putting 1 percent of its equity into a fund to protect wilderness and inhibit climate change, a bold move for a company just launching its R1S and R1T.

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RIVIAN

  • Rivian CEO RJ Scaringe announced a new fund called Forever that will put money from the young electric-vehicle company into “high-impact climate initiatives” to protect wilderness.
  • Scaringe said Rivian will invest 1 percent of its equity (not profits) in this fund to move away from the “massive industrial complex” that our current lifestyles rely on.
  • Rivian could end up being valued at $50 billion or even $80 billion in its upcoming IPO, according to various analysts. That would mean a lot of money being spent on Forever.

Rivian has been embracing a curious word in its marketing for the past year or two: forever. What started as the “Adventurous Forever” tagline in a series of videos in 2020 about the all-electric R1T pickup and R1S SUV became a new philanthropic mission this week with the announcement of, well, “Forever.”ADVERTISEMENT – CONTINUE READING BELOW

Scaringe correctly notes that automakers (and the rest of us) cannot continue to build and consume products as we have been for the past century. The “massive industrial complex” that humans have created, he writes, is “rapidly changing the composition of our atmosphere while simultaneously destroying the interlinked natural ecosystems critical for life on the planet. Our current way of life has been enabled by hundreds of millions of years of accumulated plant- and animal-based carbon in the form of fossil fuels. On our current path, we will fully exhaust this stored energy in only a few more generations and, in the process, carbonize our atmosphere, and damage natural ecosystems to such a degree that life as we know it will not be possible.”ADVERTISEMENT – CONTINUE READING BELOWCLIMATE CHANGESSchwarzenegger Lends EV to Young Climate Activist Cambridge, MA, to put Global-Warming Caution LabelBiden Announces Incentive Plan to Spur EV Demand
One important detail in Scaringe’s announcement is that Rivian isn’t going to invest some portion of its profits into environmental causes. That would be the very definition of greenwashing, since Rivian is gearing up for an IPO and in some of the paperwork it filed to go public said that it lost $2 billion since the beginning of 2021 and over a billion in 2020. In fact, Rivian will spend around $8 billion building up its facilities and other manufacturing infrastructure through the end of 2023, the New York Times reported. In the Securities and Exchange Commission filing, Rivian specifically said possible investors should not be looking for profits anytime soon: “We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity, and ramp up operations, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”

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But equity? Equity is another story. It’s difficult to know exactly what Rivian’s valuation or equity will be, but over the summer sources told Reuters that Rivian could be looking for a valuation somewhere in the $50-to-$80-billion range in its IPO. Institutional investors including Amazon and Ford have already plowed billions into Rivian, but the stock market has not yet had its say. To cite one obvious comparison, Tesla took years to make a profit, but the company was valued at around $700 billion earlier this year, way more than other automakers. Shareholder equity, which can be calculated by figuring out a company’s total assets and then subtracting its total liabilities, isn’t the same as valuation, but the two are connected. ADVERTISEMENT – CONTINUE READING BELOW

However much money Rivian ends up putting into Forever, the fund’s focus will be on what Scaringe called “high-impact climate initiatives” that emphasize “preserving and restoring wildlands, waterways and oceans.” These areas shouldn’t just be protected so they can offer exciting backdrops for drone shots of an R1T off-roading, but because these are exactly the parts of our planet that act as “powerful carbon sinks that pull carbon dioxide from the atmosphere, storing carbon in soil, grasses, trees, shrubs, coral reefs and ocean floor sediments,” Scaringe wrote, and the more valuable Rivian becomes, the more money will be spent on protecting these area. 

“By putting 1% of Rivian’s equity into Forever, the natural world will become a shareholder in our success,” he wrote. “As our company’s value grows by transitioning our customers to sustainable transportation solutions, so will the value of our impact and philanthropic giving, creating a virtuous cycle of impact.”

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