Amazon-backed Electric Vehicle Manufacturer Rivian Announces $2.5B Investment

eResearch | Last week, Rivian Automotive LLC, a private electric vehicle (“EV”) manufacturer backed by Amazon.com, Inc. (NASDAQ: AMZN), announced a US$2.5 billion capital raise. Funds will be aimed at ensuring the production launch in 2021 of its electric truck and SUV line, competing against EVs from Ford (NYSE: F), General Motors Company (NYSE: GM), Nikola Corporation (NASDAQ: NKLA), Tesla Inc. (NASDAQ: TSLA), and Lordstown Motors Corp. (private).

Rivian, based in the U.S. with 2,300 employees, has over 10 years of experience researching and developing EV technologies. Rivian initially planned to develop an EV sports car, however, it pivoted and focused development on a universal EV chassis called the “skateboard” that is currently being used to develop Rivian’s R1T electric pickup and the R1S electric SUV.

The investment round included existing shareholders Amazon and BlackRock, Inc. (NYSE: BLK), with other participants including Baron Capital Group, Coatue Management LLC, Fidelity Investments and Soros Fund Management LLC.

Since 2018, Rivian has raised a total of US$5.55 billion, the majority of which were equity raises, except a US$200 million loan from Standard Chartered Bank in 2018. The funds were used towards supporting development efforts of Rivian’s R1T and R1S EVs, which were expected to launch later this year, however, the launch date was pushed to next year due to COVID-19 impacts.

Photo 1: Rivian R1T with Camping & Kitchen Accessories

Rivian Partnerships

Last year, Amazon announced a partnership with Rivian for the development of 100,000 EV delivery vans, a significant bulk purchase order that pushed Rivian to become one of the market leaders in EV sales. Amazon is currently testing prototypes and is expected to launch its EV delivery vans on public roads next year, with 10,000 vans expected to be in service by 2022.

The investment comes shortly after Amazon announced a US$700 million investment in Rivian, supported by Amazon’s recently announced US$2 billion investment fund focused on “sustainable and decarbonizing technologies”.

Last year, Ford announced a US$500 million investment to leverage Rivian’s skateboard chassis system for the development of a future Lincoln luxury EV model. However, the partnership was mutually cancelled due to COVID-19 impacts.

Ford expects to continue its relationship with Rivian to develop an “alternative vehicle” using the skateboard chassis. Meanwhile, Ford decided it was best to use its own development efforts to build an EV for the Lincoln brand.

Last year, Cox Technologies, a digital platform focused on improving the process of purchasing, selling, and owning cars, announced a US$350 million partnership with Rivian to explore synergies in service operations, logistics and digital retailing.

RJ Scaringe, CEO of Rivian, stated “We are building a Rivian ownership experience that matches the care and consideration that goes into our vehicles. As part of this, we are excited to work with Cox Automotive in delivering a consistent customer experience across our various touch-points. Cox Automotive’s global footprint, service and logistics capabilities, and retail technology platform make them a great partner for us.”

Rivian’s “Skateboard” Electric Chassis

Rivian’s R1T and R1S EVs were developed with 91% component similarities, due to its proprietary reusable chassis system called the “skateboard”, which includes a central battery with braking, suspension, and cooling.

PHOTO 2: Rivian’s “skateboard” Electric Chassis

The skateboard is expected to be Rivian’s foundation for future EV developments, in addition to potentially becoming a new revenue stream, in which Rivian could license the electric chassis to other manufacturers. The low-centre-of-gravity and flat design of the skateboard allows easy customization and mounting of various car body types.

Karma “E-Flex” Platforms

Another company focused on developing a universal EV chassis is the Karma Automotive Company, a private EV manufacturer who last month showcased five examples of its E-Flex Platforms, a rolling chassis system made with an EV architecture.

The E-Flex Platforms is developed at Karma’s state-of-the-art assembly plant called the Karma Innovation and Customization Center, and is expected to help manufacturers optimize development costs when engineering, testing, and building EVs.

PHOTO 3: Karma’s E-Flex Platforms

EV Industry

According to the International Energy Agency’s recent edition of the Global EV Outlook report, EV sales this year are expected to be flat year-over-year and match the 2.1 million vehicle sales recorded last year.

However, in the past three months, the pandemic caused factory shutdowns across Asia, Europe and North America, in addition to supply chain disruptions, which impacted operations across the entire automotive industry, including EVs.

According to Research and Markets, the EV industry is expected to reach sales of 4.2 million units by 2021, growing at a CAGR of over 22%. However, sales are expected to see a drop due to COVID-19 impacts.

For other EV updates from eResearch:

• June 2020: “Quarterly Electric Vehicle Industry Update: Strong Growth Amid COVID-19 Crisis”
• April 2020: “Electric Vehicle Industry Update Q1/2020”
• February 2020: “Electric Vehicle Industry Update – Full Steam Ahead for EVs”
• January 2020: “Electric Vehicle Industry Update”

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