Rivian has yet to deliver any of its battery-powered pickups, SUVs or Amazon
The company, which is readying a revamped plant in Normal, Illinois, to build its zero-emission vehicles, said the latest round is led by previous investor T. Rowe Price
The funding lifts Rivian’s total haul to at least $5.4 billion to get up and running, the largest cash hoard amassed by any electric vehicle startup ahead of production launch–including rival Tesla
Starting a new auto company from scratch is wildly expensive, and Rivian’s latest infusion of funding will smooth out operations in the early years, says Guidehouse Insights analyst and Forbes contributor Sam Abuelsamid.
“Realistically, Rivian is looking at the potential that when they launch they will likely be operating at a loss, but they’ll still have suppliers that want to be paid,” he said. “This gives them a lot more runway.”
It will compete head-to-head with Tesla in the nascent electric pickup space, with its innovative but more traditionally-styled R1T going up against Elon Musk’s hard-edged Cybertruck, which sports more polarizing looks. And where Rivian’s branding ties its models to healthy outdoor activities at pristine mountains, beaches and winter scenes, Cybertruck is more of a futuristic military vehicle crafted for Terminator-like, post-apocalyptic settings. Tesla fans like it, however: Musk claims to have hundreds of thousands of Cybertruck orders. As a result, Tesla is in talks with states including Texas and Oklahoma over a new factory to build it.
Rivian’s extra funding may also be a sign it expects higher demand for its products than initially anticipated, Abuelsamid says. “It could be that that they are seeing enough potential business and customers lined up, things that haven’t been announced yet, to justify a second plant.”
Along with its R1S SUV, Rivian’s revenue stream may be stable in the early years owing to an order from major backer Amazon for 100,000 electric delivery vans. Nikola, a startup maker of hydrogen- and battery-powered semis, is also moving into the electric pickup space with its Badger model.
“With all three launches occurring in 2021, our teams are working hard to ensure our vehicles, supply chain and production systems are ready for a robust production ramp-up,” RJ Scaringe, Rivian’s 37-year-old founder and CEO, said in a statement. “We are grateful for the strong investor support that helps enable us to focus on execution of our products.”
Scaringe has generated significant excitement since bringing Rivian out of stealth mode in 2018 with plans for a line of long-range, rechargeable trucks built off a highly functional “skateboard” platform that integrates the battery pack, drive components and suspension system. Both the R1T and R1S are to have electric range of up to 400 miles per charge–well more than any of Tesla’s current EVs–and they are priced from $68,000 and $72,500, respectively.
“We are excited to continue this journey with Rivian’s innovative and talented team as they now prepare to deliver their groundbreaking products that help shift to a carbon-neutral planet,” said Joe Fath, portfolio manager of T. Rowe Price Growth Stock Fund.
Along with Amazon, T. Rowe Price, Fidelity and Soros Fund, Rivian backers include Ford and Cox Automotive. The $2.5 billion investment announcement is Rivian’s first of 2020 and doesn’t include any new board seats, the company said.