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Investors are looking at EV startup, Rivian, as the next big bet in the electric vehicle manufacturing industry. This comes after Rivian’s claims that it is planning to produce its own electric truck as well as a sport utility vehicle, which should be available by mid-2021. It is also going to develop electric delivery trucks for Amazon. Amazon is already testing Rivian’s all-electric delivery van. Amazon is using the inclusion of EVs as part of its approach to decrease emissions.
Tesla CEO, Elon Musk recently overtook Jeff Bezos on Bloomberg’s Billionaire Index to reach the acclaimed spot of the world’s richest person. Now, Amazon CEO, Bezos is partnering up with Rivian to take on Tesla and capture part of the EV market.
Amazon Inc. is not just a customer putting in preorders, the global technology company is a serious investor behind the new EV startup. Rivian has raised $2.65 billion to start manufacturing its all-electric vehicles that it’s been working on for over a decade. Amazon is also not the sole investor though; Fidelity and Ford Motor are just some of the big names that provided a cash boost.
Rivian’s manufacturing plant was a 2.6-million-square-foot factory in Normal, Illinois, which the company purchased in 2017 for $16 million but it has since refurbished the facility at a cost of over a billion dollars. Currently, only a few of its EVs are being built on a daily basis.
Gartner analyst, Michael Ramsey, said he was curious whether Rivian would be able to dodge the mistakes Tesla made a few years ago when it tried to increase the Model 3 production, which ended in production chaos.
Rivian is moving to seize the emerging opportunities in the electrification of transportation. Although Tesla started out with an annual production of 50,000 cars, it has hit the 500,000 mark as shown in its December 2020 figures.
Rivian seems to be following trends initiated by Tesla such as not using dealerships to sell its vehicles. The Rivian EV truck and SUV are said to be around the starting price of $67,500, and will have a more conventional design, which may appeal to those who don’t find the Cybertruck an appealing option.
For its first year of production in 2021, the company plans to manufacture 20,000 all-electric trucks and SUVs and hopes to double that by 2022. It is not yet known how many preorders Rivian has taken in pre-production.
Tesla boss, Elon Musk is a force to be reckoned with when it comes to EVs and its manufacturing facilities. Musk has been phenomenal is driving Tesla to stock market heights and creating a brand that’s been adopted by a mass of fans.
In contrast, Rivian’s CEO, Robert (“RJ”) Scaringe is an academic with a Ph.D. from the Massachusetts Institute of Technology, and his Twitter feed is a lot more conservative that Musk’s eccentric comments. Scaringe posts a steady stream of updates showing Rivian’s EV designs and vehicle updates.
However, last year, Tesla and Rivian were embroiled in controversy when ex-Tesla employees were said to have taken confidential information from Tesla and passed it on Rivian, but Rivian has denied receiving any such material.
Rivian fired back at Tesla’s allegations and requested the lawsuit be dismissed claiming the trades secrets theft had no solid evidence. Some of the accused employees who left Tesla ended up with jobs at Rivian.
Now, with Rivian’s entry to the market, it could agitate Musk even more. Additionally, with Bezos backing Rivian, it could fuel further tensions and competition between the two companies.