Amazon places big bet in Tesla rival and electric truck startup Rivian
- Amazon led a $700 million investment in Rivian, an electric pickup truck startup
- The tech giant could use Rivian’s tech to speed up and cut the cost of deliveries
- Rivian debuted its R1T pickup and R1S SUV for the first time in LA last November
- The startup has been pegged as a rising competitor for Tesla’s electric pickup
Amazon said on Friday it would lead a $700 million investment in U.S. electric pickup truck startup Rivian, in the e-commerce giant’s biggest bet on technologies with potential to reshape the automotive sector.
The deal represents a major endorsement of Rivian’s electric vehicle technology by the world’s largest online retailer, which is looking for ways to boost the speed and reduce the cost of its deliveries.
Reuters reported on Tuesday that Amazon and General Motors were in talks to invest in Rivian.
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Amazon is leading a $700 million investment in electric pickup startup Rivian, in the tech giant’s biggest bet on technologies with potential to reshape the automotive sector.
THE RIVIAN RT1 ELECTRIC TRUCK
Four independent motors – with 200 horsepower available at each wheel
0-60mph in three seconds
Will have range of about 400 miles
Prices start at just under $70,000 before federal tax credits
Payload of 1,760 pounds and a towing capacity of 11,000 pounds
GM’s talks with Rivian about an investment are continuing and any deal would be announced at a later date, people familiar with the talks said on Friday.
Rivian could ultimately be valued at between $3 billion and $4 billion, one of the sources said.
The Rivian deal comes as its much larger electric car manufacturing rival, Tesla, struggles to stabilize production and deliver consistent profits as it ramps up its mass market Model 3 sedan.
Tesla CEO Elon Musk told investors in August that an electric pickup is ‘probably my personal favorite for the next product’ from the company.
But he has spoken only in general about a potential launch, saying that it would happen ‘right after’ Tesla’s Model Y, which the company has targeted to start production in 2020.
Rivian unveiled its electric R1T pickup and R1S SUV for the first time at the Los Angeles Auto Show last November.
But the company had piqued Amazon’s interest earlier, according to one of the sources.
Rivian’s truck will offer a payload of 1,760lbs and a towing capacity of 11,000lbs – attributes more comparable to the Detroit Three’s mid-sized trucks than to best-selling large trucks
Amazon CEO Jeff Bezos personally reached out to Rivian founder and CEO R.J. Scaringe last summer to express interest in an investment, the source said.
Since then Amazon has stepped up its investment in the car sector, participating in a $530 million funding round announced last week in self-driving car startup Aurora Innovation.
Amazon is looking for deals that can speed packages to shoppers’ doorsteps regardless of spikes in consumer demand or shortages of delivery personnel.
Last year, Mercedes said Amazon had become the biggest customer of its Sprinter vans, securing 20,000 vehicles for delivery contractors.
Amazon has sought to win customers inside the car as well.
Working with BMW, Ford and Toyota, Amazon has enabled its Alexa virtual assistant to be installed in new models so drivers can dictate what music they want to hear and what tasks they want it to perform, hands-free.
Rivian aspires to be the first to produce a mass market electric pickup. The car uses a huge touchscreen, with a cloud connected service for everything from navigation to health checks
Rivian has not disclosed prices for its truck, but CEO R.J. Scaringe said it will start at just under $70,000 before federal tax credits for the entry-level model
Rivian aspires to be the first to produce a mass market electric pickup. It intends to begin selling its R1T by the end of 2020.
Scaringe has described the Rivian vehicle’s platform as a skateboard that packages the drive units, battery pack, suspension system, brakes and cooling system all below wheel height to allow for more storage space and greater stability due to a lower center of gravity.
He has also said the company plans to partner with outside firms to develop advanced self-driving technology, rather than try to do so on its own.
Rivian’s existing financial backers include Saudi auto distributor Abdul Latif Jameel Co, Sumitomo Corp of Americas and Standard Chartered Bank.
WHAT IS THE TESLA SEMI TRUCK?
This is not the first expansion of the Tesla range beyond cars, with an electric semi truck planned for production in 2019.
Tesla began accepting preorders for its electric truck in November and revealed it will cost buyers at least $150,000 (£120,000).
For those who want their truck in a hurry, a special ‘founders series’ is being made, with $200,000 (£150,000) required up front to get one of the first 1,000 made.
Without a trailer, the Tesla Semi achieves 0 to 60 mph in five seconds, compared to 15 seconds in a comparable diesel truck.
It does 0 to 60 mph in 20 seconds with a full 80,000-pound load.