Rivian — the hyped electric truck maker is going public today — and the largest IPO of 2021 is giving investors lots of questions.

Investors burned by early-stage EV startups (i.e. Nikola and Lordstown) are highly skeptical of this cash-burning, zero-revenue company. While those that missed out on Tesla’s gains are wondering — Is this the next Tesla?

New Constructs, an investment research firm, outlines the bear case for Rivian and why it should only be worth $13B — 81% less of an expected IPO valuation of $70B. Here are some of its biggest issues:

• A market valuation putting Rivian in overvalued territory — which assumes massive growth and ability to capture a large market share.
• The EV market is more competitive today — with nearly every car maker plotting their EV domination.

Rivian is being compared to Tesla and Lucid (NASDAQ:LCID), another consumer EV company that went public in 2021 and just delivered its first vehicles in recent weeks.

But investor attitudes towards EV stocks are a lot different today compared to 2010 when Tesla went public at a $1.7B valuation and was already delivering vehicles at the time:

• Investors are valuing early-stage EV companies a lot higher with Lucid going public at a $24B valuation before it even delivered any vehicles.
• And now, Rivian is going public at a nearly $65B valuation despite all the challenges it faces.

Turning a profit on a cash-burning EV maker is incredibly difficult — a pain that long-time Tesla investors are well aware of. And Rivian also lacks Tesla’s manufacturing advantages and meme lord status of Elon Musk.

Rivian’s success in the coming months will depend on its execution — and if it’s weak — its cash balance won’t be the only thing getting burned.

Dive Deeper: Rivian’s backstory and its reliance on Amazon.