Upstart auto tech startup Rivian LLC is in talks with Amazon and General Motors Company for a massive investment that will value Rivian at between $1 billion to $2 billion.
Founded in 2009 by Robert "RJ" Scaringe (who has a doctorate in mechanical engineering), Rivian has ambitions of being the first to bring an electric truck to market in the United States ahead of Tesla Inc. Sources said the deal, which might close within the month, will give Amazon and GM minority stakes in Rivian.
"We admire Rivian's contribution to a future of zero emissions and an all-electric future," said GM in a statement. GM, however, refused to directly comment on the investment talks with Rivian.
Amazon last week invested an undisclosed sum in self-driving car startup Aurora Innovation Inc. in a $530 million funding round. This second round of funding valued Aurora Innovation at more than $2.5 billion.
Amazon sees its investment in Aurora Innovations as part of its relentless push towards widespread automation. The company is designing a sophisticated delivery system that will include aerial drones and driverless, electric trucks to deliver goods to its millions of customers worldwide.
Rivian's current investor list includes Abdul Latif Jameel Company (ALJ), Sumitomo Corporation of Americas and Standard Chartered Bank. ALJ has agreed to invest almost $500 million. Sumitomo invested an undisclosed sum while Standard Chartered provided debt financing of $200 million.
ALJ is a Saudi Arabia-based diversified business active in 30 countries, with a core business in automobile sales, manufacturing, assembly and engineering. It's one of the largest privately held firms in Saudi Arabia.
Even Tesla CEO Elon Musk is a fan of electric trucks, but first decided to produce electric vans when he founded Tesla in 2004. In August 2018, Musk admitted that an electric pickup is "probably my personal favorite for the next product" for Tesla.
He revealed a Tesla electric truck will happen "right after" Tesla's Model Y, which the company will start producing in 2020. On the other hand, Rivian plans to begin selling its electric R1T pickup in the fall of 2020.
Rivian hopes to take the American motorists' infatuation with SUVs and trucks to the electric vehicle (EV) arena. It's no wonder Rivian chose an electric truck to make a statement about its challenge to Tesla at the Los Angeles Auto Show in November 2018.
Rivian said the R1T will have a range of 400 miles, with its four individual electric motors allowing for all-wheel-drive. Scaringe said the R1T will be able to hit 60 mph in 3 seconds. The truck can tow up to 11,000 pounds.
Rivian is also building the R1S, an electric seven-passenger SUV. Rivian said the R1S will also have a range of more than 400 miles.