Ford Motor Company (NYSE:F) and Amazon Inc (NASDAQ:AMZN) have announced a $2,5 billion investment round in the Michigan-based electric cars start-up Rivian. Together with T. Rowe Price Group Inc (NASDAQ:TROW), they have been investing in the company since 2019.
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The Best-Funded Automotive Start-Up
In 2019, Amazon announced an investment of $700 million, raising more than $10.6 billion in the last two years. Also, the company is planned to begin deliveries in 2022.
As explained by Rivian’s RJ Scaringe, “this injection of funds from trusted partners enables Rivian to scale new vehicle programs, expand our presence in national facilities and drive international product launches.”
Investment fund T. Rowe Price Group had bet very strongly on Tesla Inc (NASDAQ:TSLA) for years but in 2019 decided to sell 80% of its stake in the face of poor financial results.
Now, Rivian must step on the accelerator and set up its plant in Normal, Illinois, where it will manufacture the Rivian R1T electric pick-up and the R1S electric SUV, in addition to the Amazon electric vans that are already making their first deliveries as part of initial testing.
For now, R1T deliveries will be delayed until September due to the effects of the pandemic, in a very competitive scenario in the U.S.
Rivian, Tesla’s Competitor
Rivian is working on a wide array of premium electric vehicles, with greater range than any of the options in the market today.
The company is a close competitor to Tesla, as it promises to do for trucks what Elon Musk’s company is doing for luxury cars.
Tesla is bound to deliver its Cybertruck by the end of 2021, featuring the Crab Mode, similar to that of Rivian R1T’s “tank mode.” It sports an e-motor in every wheel that allows the vehicle to attack any terrain without complex mechanical systems.
In addition to developing advanced battery systems, Rivian also designed a skateboard-like chassis that it plans to sell to other automakers. For Ford, investing in Rivian is a way to leave the competition behind and get new ideas for an electrified future.
Meanwhile, Amazon kept quiet about its interest in the company for a long while before its initial investment, but the retail giant sees Rivian’s vehicles as a way to reducing its carbon footprint and build its own distribution network.
Ford, Tesla, and Amazon are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.
