By Kamaruddin Bujang
Electric truck start-up and potential Tesla rival Rivian announced a $700 million investment round led by Amazon on Friday. The announcement comes less than three months after Rivian revealed its first two products, an all-electric pickup and SUV that, some analysts have said, could pose a direct challenge to both established truck manufacturers like General Motors and Ford, as well as upstart Tesla which is developing its own battery-electric pickup.
The Friday morning announcement comes just days after reports began circulating that GM would join Amazon in the new round of financing. But a well-placed source involved in the negotiations that “you don’t find all the presents under the Christmas tree,” suggesting that another development is in the works, one that could come at or before the New York Auto Show in April where Rivian is scheduled to hold a news conference. RJ Scaringe, Rivian founder and CEO,said “Beyond simply eliminating compromises that exist around performance, capability and efficiency, are working to drive innovation across the entire customer experience. Delivering on this vision requires the right partners, and are excited to have Amazon on the journey to create products, technology and experiences that reset expectations of what is possible.” and added “This investment is an important milestone for Rivian and the shift to sustainable mobility.”
For the e-commerce giant, the move follows barely a week after it joined in with venture capital firm Sequoia, as well as Lightspeed Venture Partners, Shell Ventures and others, to take a stake in Aurora. That deal put a roughly $2.5 billion valuation on Aurora, an autonomous vehicle technology start-up run by Waymo and Tesla alumni. Exactly why Amazon would want to make such moves remains hazy, though it follows steps taken by other high-tech firms, such as Alphabet and Apple to explore opportunities in electrified and autonomous mobility. “We’re inspired by Rivian’s vision for the future of electric transportation,” said Jeff Wilke, Amazon’s worldwide consumer CEO. “RJ has built an impressive organization, with a product portfolio and technology to match. We’re thrilled to invest in such an innovative company.”
The round included investments from Rivian’s existing shareholders. The start-up will remain an independent company. Rivian currently has more than 750 employees located in several locations, including Plymouth, Michigan; San Jose and Irvine, California; Normal, Illinois; and Surrey, England.
Rivian plans to launch its R1T pickup truck and R1S sport utility in the U.S. in 2020, and begin introducing them overseas in 2021. The company has modeled both vehicles on what it calls a “skateboard” platform, which it says it flexible enough to accommodate several different vehicle body styles. Both, at least initially, will feature 180 kilowatt-hour battery packs, almost twice the size of the largest pack currently offered by Tesla. That will be more than enough to deliver a range of 400 miles under optimal conditions, according to Rivian CEO RJ Scaringe.
Performance will rival a Tesla Model X SUV with Ludicrous Mode, Scaringe says, claiming the two trucks will hit 60 mph in 3 seconds and 100 mph in less than 7 seconds, with a top speed of 125 mph. They will, meanwhile, be able to tow up to 11,000 pounds. Rivian had not hidden its search for funding. While development of the two battery trucks was moving along at a fast pace, Rivian had also acquired the old Mitsubishi assembly plant in Normal, Illinois. But it was not clear whether the company had the money — or the expertise — to actually produce the two vehicles on its own.
While a source broadly hinted that more financing news could be in the works, there is also a possibility that Rivian may be lining up help on the manufacturing side. Trucks and SUVs are also increasingly more popular with U.S. consumers than cars, and customers seem willing to pay more for them, meaning more profits for automakers. The business case for an electric pickup or SUV could be stronger than one for a sedan, given how much money companies have had to sink into electric batteries and motors and how difficult it has been for companies to make money on electric cars.
It currently offers a single, long-range all-electric model, the Chevrolet Bolt EV, but plans to start rolling out as many as two dozen others, starting with a Cadillac crossover, in 2021.