Cramer is skeptical Rivian is the next Tesla and would rather own Ford

CNBC’s Jim Cramer explained Monday that even while electrical-car or truck startup Rivian Automotive has some powerful backers as it prepares to hit the public marketplaces, he is skeptical it will be the following Tesla and would alternatively have shares of Ford Motor.

“Even if all the things goes right for Rivian, this industry is getting a small crowded in in this article. When Tesla was starting up out there was no one else,” Cramer claimed on “Mad Revenue.” Now, however, “Rivian’s received Ford’s F-150 Lightning very hot on its heels, alongside with GM’s electric Hummer and even Tesla’s Cybertruck.”

With Amazon and Ford as sizable investors, Rivian priced its shares in between $72 and $74 for its IPO and is probably to start off trading Wednesday. “Provided that the enterprise programs to supply 135 million shares, we’re speaking about a $9.85 billion fundraise, which would make this the sixth- or seventh-major IPO in U.S. historical past,” Cramer said.

Cramer mentioned he wouldn’t be surprised if Rivian’s stock normally takes off even with such a large valuation since “the individuals getting this matter will not likely care about valuation.” Somewhat, traders will be betting that the younger firm can scale up production and develop into a significant competitor in the developing EV sector.

Cramer complimented Rivian for the variety of orders it is received for not only its pickup truck and prepared SUV, but also its significant industrial van offer with Amazon. Moreover, the truth a competitor like Ford is an investor in Rivian “is a big acknowledgment” of Rivian’s opportunity, he stated.

In the long run, Cramer told viewers that “if you really imagine in Rivian, you have acquired my blessing to speculate.” Even so, he extra, “I’d much want to continue to be on the sidelines and get my electric auto exposure from Ford, which is why we have it for the charitable believe in.”

Indicator up here for the new CNBC Investing Club e-newsletter to follow Jim Cramer’s every shift in the marketplace, delivered right in your inbox.

Disclosure: Cramer’s charitable trust owns shares of Ford and Amazon.