Amazon leads $700M investment for Rivian

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Story via: https://www.autonews.com/manufacturing/rivian-lands-700m-investment-commitment-led-amazon

DETROIT — Amazon Inc. will lead a $700 million investment round in electric vehicle startup Rivian Automotive.

The suburban Detroit company announced the investment Friday, following reports of the companies as well as General Motors being in talks earlier in the week.

A Rivian spokesman said Amazon is one of two investors in the round, which does not include GM. The other is the company's long-term investment partner ALJ.

"This investment is an important milestone for Rivian and the shift to sustainable mobility," said Rivian CEO RJ Scaringe in a release. "Beyond simply eliminating compromises that exist around performance, capability and efficiency, we are working to drive innovation across the entire customer experience."

Just because GM is not a part of this round does not mean the company is not in talks to invest in Rivian. Earlier in the week, Reuters first reported that Amazon and GM were in talks to make investments in the company that could value the company at between $1 billion and $2 billion.


Rivian declined to comment on the breakdown of the $700 million investment, nor would it comment the company’s valuation.

Scaringe, speaking last month at the Automotive News World Congress, discussed partnering with other brands and potentially licensing technologies to other companies in 2019.

Rivian plans to produce vehicles at the former Mitsubishi Motors Corp. plant in Normal, Ill., it acquired in 2017. Deliveries of the R1T pickup are expected to begin late 2020, followed by the SUV and four additional products through 2025.

Scaringe previously said all the planned products share the same battery and flat "skateboard" architecture.

GM executives, including CEO Mary Barra, have teased the idea of an all-electric pickup for the automaker. However, the company has never put a time frame on such a project. GM, following reports of the talks, said it admired Rivian's "contribution to a future of zero emissions and an all-electric future."

An all-electric future is part of Barr's "Triple Zero" vision: Zero crashes, zero emissions and zero congestion.

Why EV pickups make sense

Morgan Stanley analyst Adam Jonas wrote in a note this week that the next and potentially imminent major product frontier for EVs will be the highly lucrative and U.S.-dominated pickup market.

"A culmination of battery cost reduction, architecture, duty cycle, and price point – e-pickups are an important area of investor focus," he said.

Having a stake in Rivian could help it bring an all-electric pickup to market without straining or moving internal resources away from its full-size pickups and SUVs with internal combustion engines.

Electric pickups, according to Jonas, make sense for a number of reasons:

  • High torque for towing and hauling.
  • Higher vehicle price points to pass on higher costs.
  • Work-site applications that can work closely with the fleet to manage with charging needs.
  • The ability to take advantage of electric power to run electric tools, accessories, and other applications.

Amazon's interest
The benefit for a company such as Amazon, Jonas says, includes using the technology to shape electric delivery vehicles to support its own logistics efforts and tap into the $900 billion logistics industry.

Jeff Wilke, who runs Amazon's worldwide consumer division, said the tech giant is “thrilled” to invest in Rivian.

“We're inspired by Rivian's vision for the future of electric transportation,” he said in a statement. "RJ has built an impressive organization, with a product portfolio and technology to match,” he said.

The reported discussions between Rivian and GM follow Jim Farley, Ford Motor Co.'s president of global markets, reconfirming that the company would eventually be "electrifying the F series, both battery-electric and hybrid." He declined to provide a time frame or specify whether Ford would offer an electric F-150, Super Duty or both.

Ford Executive Chairman Bill Ford confirmed last year that Ford planned an F-series EV, at a celebration marking 100 years of the Rouge manufacturing complex, where the F-150 is assembled.
 

A Hawk

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Well that's good news. With Amazon backing the company now, I can't see it not launching successfully.
 

sdTom

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It also says Rivian's plan was also very solid to start with. You know Amazon looked at the books closely and behind the curtain to make sure things were on a trajectory for success
 

ElectricTrucking

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I'm all in. Amazon will give strong support and finance without wanting to micro manage build, I hope. I doubt GM could keep their hands off if their history is of any notice.
 

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I'm all in. Amazon will give strong support and finance without wanting to micro manage build, I hope. I doubt GM could keep their hands off if their history is of any notice.
True but if it's a minority non-controlling stake, GM wouldn't be able to make any management decisions.

GM can still potentially come in as an investor later on. They're trying make as money as possible right now from truck/SUV sales to pay for electrifying their models in the future. If it ends up investing in or maybe even acquiring Rivian (god I hope not!), that would help them make a big leap forward in their electrification goals.
 

JG Rivian

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Having Amazon as a financial investor at this stage sends a serious signal that this company is going to come to market in 2020. What happens after release is still up in the air. Rivian is targeting a very specific part of the market that isn’t necessarily the poster child for EV adoption due to utility needs that present EV’s can’t satisfy. If their truck and SUV are as capable as they have been described, I think there will be a good amount of current EV owners willing to try them out along with some new, non-EV owners wanting to take the plunge.

Has there been mentioned anywhere what self driving firm Rivian has partnered with? Read they were not aiming to tackle this in house. Given they are saying level 3 capable hardware will be shipped at launch, they must be working with someone at this point. Cruise Automation was acquired by GM back in ‘16. Possibly their self driving tech will be supplied by them.
 

A Hawk

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Having Amazon as a financial investor at this stage sends a serious signal that this company is going to come to market in 2020. What happens after release is still up in the air. Rivian is targeting a very specific part of the market that isn’t necessarily the poster child for EV adoption due to utility needs that present EV’s can’t satisfy. If their truck and SUV are as capable as they have been described, I think there will be a good amount of current EV owners willing to try them out along with some new, non-EV owners wanting to take the plunge.
Agreed, besides the actual usefulness of having an extra $70M cash to use, to have such a big name backer provides legitimacy to the company and its vehicles, and generates buzz... and boy did this generate buzz! Simply because Amazon was the investor, Rivian made headlines in all the major papers and networks, and not just in their automotive sections.

Rivian is starting to generate Tesla level buzz :rock:
 

Alan Burns

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Having Amazon as a financial investor at this stage sends a serious signal that this company is going to come to market in 2020. What happens after release is still up in the air. Rivian is targeting a very specific part of the market that isn’t necessarily the poster child for EV adoption due to utility needs that present EV’s can’t satisfy. If their truck and SUV are as capable as they have been described, I think there will be a good amount of current EV owners willing to try them out along with some new, non-EV owners wanting to take the plunge.

Has there been mentioned anywhere what self driving firm Rivian has partnered with? Read they were not aiming to tackle this in house. Given they are saying level 3 capable hardware will be shipped at launch, they must be working with someone at this point. Cruise Automation was acquired by GM back in ‘16. Possibly their self driving tech will be supplied by them.

What bothers me about Amazon being an investor is their desire to acquire all electric delivery vehicles on the Rivian skateboard chassis. This plan by Amazon with a couple of their directors on the Rivian board of directors could seriously affect the production of R1T and R1S vehicles for the consumer market.
 

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What bothers me about Amazon being an investor is their desire to acquire all electric delivery vehicles on the Rivian skateboard chassis. This plan by Amazon with a couple of their directors on the Rivian board of directors could seriously affect the production of R1T and R1S vehicles for the consumer market.
High demand would be a good issue to have for the company from a growth and financial stability standpoint. But I can see your point about the consumer side possibly having to deal with long delays and waits for their Rivians. The longer customers wait for their orders, the more time it gives Tesla and Ford to comes out with their electric pickups and possibly steal impatient Rivian customers...
 
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Do we know how much funding Rivian has had to date after this Amazon investment? I'm curious because it took Tesla $2 billion to bring the Model S to market. :surprised:
 

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Do we know how much funding Rivian has had to date after this Amazon investment? I'm curious because it took Tesla $2 billion to bring the Model S to market. :surprised:
Rivian raised $450 million last year, so with this $700 million Amazon investment, they're at about $1.05 billion funding raised.
 

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Here's a crazy (or not) thought - maybe customers will be able to order a Rivian on Amazon??
 

Electric Rivilution

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Just a few days before announcing the $700M investment in Rivian, Amazon also invested $530M in Aurora, a company developing autonomous vehicle technology. Put 2+2 together and it looks like Amazon is interested in investing to help its future ability to deliver products more efficiently, probably by use of self driving cars to make Amazon deliveries.
 
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