- Rivian has announced that Amazon would lead a $700 million investment round in the truck- and SUV-focused electric-vehicle startup.
- Rivian has been seen as a rival to Tesla in the pickup segment; Tesla has yet to unveil a pickup.
- Reports had circulated that General Motors would join Amazon in the investment, but Rivian’s announcement did not mention GM participation.
On Friday, the truck- and SUV-focused electric-vehicle maker Rivian announced a $700 million investment round led by Amazon.
“This investment is an important milestone for Rivian and the shift to sustainable mobility,” RJ Scaringe, Rivian’s founder and CEO, said in a statement.
“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.”
The Michigan-based startup recently unveiled two all-electric vehicles, the R1T pickup and the R1S SUV, at the 2018 Los Angeles Auto Show. The company has pitched itself toward the high-performance, adventure-oriented segment of the market, where gas-powered competition would include the likes of the Ford Raptor pickup.
Read more: Tesla wants to build a pickup truck - here's why that will be its biggest challenge
A future Tesla rival
But on the electric side, Rivian has been viewed as a Tesla rival, especially given Tesla CEO Elon Musk's pledge to reveal an electric pickup, possibly by this summer. Rivian isn't new to the game, either. It was founded in 2009.
Before the news of the Amazon deal, there had been reports that Amazon and General Motors would combine to invest in Rivian at a valuation of $1 billion to $2 billion. Rivian did not comment on the company's valuation following the investment round and declined to indicate whether the funding would be used to expand production at the startup's factory in Illinois, a former Mitsubishi plant.
Rivian's announcement, which did not mention GM, said Amazon would lead this investment round with addition capital coming from existing investors, including the Saudi Arabia-based Abdul Latif Jameel.
GM referred Business Insider to a previous statement about Rivian.
"We admire Rivian's contribution to a future of zero emissions and an all-electric future," the carmaker had said.
Rivian declined to comment on the Detroit giant's involvement.
"We're inspired by Rivian's vision for the future of electric transportation," Amazon CEO of worldwide consumer, Jeff Wilke, said in a statement.
"RJ has built an impressive organization, with a product portfolio and technology to match."
Deal synergies aren't yet clear
Synergies on the deal for Amazon weren't entirely clear, though the justification for the online-retailing giant to invest could be based more on financial opportunities than on what Rivian could bring to Amazon's assorted businesses.
"Rivian's current position is similar to where Cruise was when GM partnered with them in 2017, an early tech startup showing a lot of promise," Karl Brauer, the executive publisher of Autotrader and Kelley Blue Book, said in an emailed statement. (GM bought Cruise in 2016 for an all-in price of $1 billion; the company is now worth almost $15 billion, following investments from Japan's SoftBank and from Honda.)
"If Amazon's commitment today leads to even more investments - perhaps a sizeable investment from an established car maker - it would give Rivian a unique position in today's dynamic automotive market," Brauer added.