Amazon Backed Rivian Will Disrupt Tesla and Nikola
Nobody believes me when I tell them Tesla’s first-mover advantage in some segments just won’t stick. With the Chinese Government boosting Nio in China, it’s actually Rivian that looks most poised to be Tesla’s main competitor in the U.S.
At the Last Futurist, we’ve been critical of Nikola, since it will be surrounded by much better competitors. Today we are going to talk about Amazon backed Rivian’s new round of recent funding in mid 2020.
Raising $1.3 Billion in late 2019 was just the beginning. Rivian has now raised a fresh round of $2.5 billion in an aggressive plan to beat Tesla and Nikola with the first all-electric pickup. Tesla isn’t the first mover in this competition. Rivian is expected to be among the first, if not the first, to bring an all-electric pickup to market early next year.
Rivian has now raised $5.6 billion already and is notably Amazon backed. Rivian won’t have to do a sneaky SPAC or IPO any time soon. New investors Soros Fund Management LLC, Coatue, Fidelity Management and Research Company and Baron Capital Group also participated. Existing shareholders Amazon and funds managed by BlackRock also joined the round. The round follows an active 2019 for the company that brought in $2.85 billion in funds through a series of investments.
Rivian is Backed by Amazon
The company has a contract with Amazon to build 100,000 electric delivery vans starting next year at its factory. Rivian also is rolling out a pickup truck and an SUV for sale to consumers next year. What’s not to like about this company? It’s perfect timing for them.
So what? As Tesla’s stock has hit an all-time high amid bubbly enthusiasm that might see it even gain entry into the S&P, we have to remember it’s early days in the EV market. There are many startups that will compete in the future of this market. In April of 2019, Ford invested a half-billion dollars into Rivian and said the companies would work jointly to develop electric vehicles. That deal was in addition to a $700 million investment from Amazon that was announced in February of 2019. Since then, Rivian has never looked back.
Rivian is among the most-anticipated challengers to Tesla and really does make Nikola look inexperienced and somewhat like an immature company. Founded in 2009, Rivian plans to build an all-electric pickup truck, the R1T, and the companion R1S SUV, starting in late 2020.
Rivian is an American Success Story
Rivian is an epic American success. Most of Rivian’s operations are in San Jose and Irvine, California, but it also has a large engineering and administrative office near Detroit. The company employs about 2,300 people. Now there’s an adjusted timeline. Rivian was set to launch its first two consumer vehiclesthis year, but postponed their release to 2021 due to the coronavirus pandemic.
Rivian’s partnership with Amazon is deep. Next year, the EV maker also plans to begin rolling out electric delivery vans for Amazon. The e-commerce giant has already ordered 100,000 of them.
Rivian also doesn’t need to rely on hype. Scaringe said in a June interview that Rivian has no plans of going public for the foreseeable future but it’s “open” to additional financing to help support its “aggressive growth plans.”
By the time Rivian does choose to do an IPO, likely in 2023, it will already be an incredible winner. The money will be used to prepare the factory in Illinois for the start of production for the company’s R1T electric pickup truck and its R1S SUV later this year, with deliveries to customers set to begin in 2021.
Since Rivian has more than $5 billion to spend on manufacturing capacity for its forthcoming electric trucks and SUVs, it will certainly be in the same conversation as Tesla and Nikola. Tesla is also slated to release its semi truck next year. Nikola will only release its semi-truck by 2022, which will be a bit late to the party.