A $700 million investment round, in which Amazon was a major player, was announced to have been successfully completed by electric truck start-up Rivian which is also touted to be a potential rival to US electric auto maker Tesla.
It was just months ago that the company, based out of Michigan i n United States, had at the LA Auto Show in November, unveiled two of its electric vehicles – an electric pickup truck and sport utility vehicle. It is believed that the success of the latest round of funding was partly because of the success of that unveiling.
“This investment is an important milestone for Rivian and the shift to sustainable mobility,” said RJ Scaringe, Rivian Founder and CEO. “Beyond simply eliminating compromises that exist around performance, capability and efficiency, we are working to drive innovation across the entire customer experience. Delivering on this vision requires the right partners, and we are excited to have Amazon with us on our journey to create products, technology and experiences that reset expectations of what is possible.”
There were reports in the media already about the interest of Amazon in investing in the startup. According to a report published by Reuters, Rivian had also managed to get investments from the US auto maker General Motors. GM however is yet to confirm the report.
A number of the existing shareholders of Rivian also participated and reinvested in the company in the latest round. The company would however continue to be an independent one despite the heavy investments. There are currently more than 750 employee working with Rivian and are distributed in multiple locations which includes cities like Plymouth, Michigan; San Jose and Irvine, California; Normal, Illinois; and Surrey in England.
The company has set itself a target of launching its R1T pickup truck and R1S sport utility in 2020 for the US market while making them available to the other overseas market starting 2021. Both of the vehicles have been modelled on the basis of what the company calls a “skateboard” platform which allows enough flexibility for accommodating multiple vehicle body styles.
According to some industry analysts, the interest of Amazon in Rivial is because of the e-commerce platform’s plans and ambitions of developing customised vehicles that would suit its logistical needs globally.
“We’re inspired by Rivian’s vision for the future of electric transportation,” said Jeff Wilke, Amazon CEO Worldwide Consumer. “RJ has built an impressive organization, with a product portfolio and technology to match. We’re thrilled to invest in such an innovative company.”
Earlier this month, Amazon had also made another investment in a separate transportation elated firm. Aurora, an autonomous vehicle technology company run by Waymo and Tesla alumni, was the receiver of the earlier investment of the online giant.
In recent times, compared to cars, American are have shown a greater affinity for trucks and SUVs and they are also apparently ready to shell out more money for purchasing one. This means that auto makers can now hope to make larger profits on units sold. Therefore the viability of a project for manufacturing electric pickups or SUVs could be greater compared to developing and offering an electric car. This is an important consideration for auto makers as well as investors because huge amounts of money are needed to be invested into electric batteries and motors. Recent times have also shown that it is difficult for companies to make money out of electric car sake.
(Adapted from CNBC.com)