Rivian is big, way big! Bigger than we ever thought a company with zero cars in their production line could be. After attracting a 700 million investment from Amazon, they are getting additional $500 investment from market giant Ford. They were initially in talks with GM but that fizzled out, mostly for the better. Ford is unarguably the top dog in the truck segment and getting them on board is only going to raise confidence- both from stakeholders and consumers. Unofficial valuations put Rivian at $5-7 billion dollars- a number that is only expected to grow.
Rivian- Everyone’s talking about them!
Rivian is a Michigan-based electric mobility brand which burst on to the scene at last year’s LA Auto Show. They showcased two utility vehicles- R1S SUV and R1T truck, both of which had good rapport with critics and show-goers alike. Our reviews were positive too, not just about the brand and its products, but also about the people who run them. With Joe Hinrichs- a highly reputed senior Ford executive, joining the board of directors, this has only improved.
Ford, Rivian and Amazon
Ford is very much interested in Electric mobility space and already has $11 billion set aside for a new range of electric vehicles. As you can see, they have no shortage of money or research capabilities, and surely don’t need to buy Rivian for these purposes. In fact, Ford is already working on an all-electric F150 and an electric ‘Mustang’ SUV.
So why do they need Rivian?
Firstly, how long has it been since a Ford product created this much hype in the market? They want something that the people are on-board with, and that for CEO Jim Hackett, is to bring a “fresh approach” to Ford’s electric-vehicle effort.
Secondly, Ford will have access to Rivian’s Skateboard platform to build electric vehicles of their own. This will be beneficial for the former, especially if Tesla decides to bring out their much-anticipated pick-up truck. This could lead to cannibalism of Rivian’s products though, and it needs to be seen how (or if) they avoid the situation.
It’s not all Ford that’s benefited and RJ Scaringe- Rivian Founder and CEO will be keen on studying and utilizing Ford’s superior manufacturing and service networks to avoid production glitches that start-ups like Tesla has had a hard time dealing with. Experience from reputed automotive bigwigs will help too.
What about Amazon?
Speaking of ‘no shortage of money’, Ecommerce giant Amazon has been investing left and right over the past few months, and none have been without reason. So even though Amazon didn’t say it, investing in Rivian will have substantial consequences for both brands.
Amazon, like all tech-giants, has a keen interest in connected mobility and autonomous driving. Both of these are essential part of electric automakers like Rivian, and Amazon probably wants to exploit this space. They also have software like Alexa which could be incorporated in to Rivian’s dashboard.
Another less-likely explanation is that Amazon wants to use Rivian’s Skateboard platform for their own electric delivery vehicles, and reduce global logistics woes to an extend. This is a huge ask ever for Amazon and I don’t see it happening
We will wait for further developments before confirming.