Rivian, a Plymouth, MI-based company getting set to launch sales of its brawny, high-end electric vehicles, will be able to give those efforts a boost after raising $700 million in new funding. Amazon (NASDAQ: AMZN) led the investment in Rivian, the latest signal the retailing and technology giant could be poised to make waves in the automotive sector in the years ahead.
Rivian says it expects to deliver orders of two vehicles it’s developing to U.S. customers by the end of next year, and to begin shipping them to other countries in 2021. Both the company’s R1T, a five-passenger pickup truck, and its R1S, a sport utility vehicle that can seat seven, can travel up to 400 miles when their batteries are fully charged, Rivian says. According to a database maintained by the U.S. Department of Energy, the highest driving range of a 2019 Tesla (NASDAQ: TSLA) vehicle is 335 miles.
The respective base prices of the truck and SUV will reportedly be $68,000 and $72,500.
The long-term success of Rivian will likely require it to take market share from Tesla, which sells more electric vehicles in the U.S. than any other automaker. Tesla also has a head start on Rivian; the California company already sells an SUV, the Model X, and plans to add a pickup truck to its catalogue. In December, Tesla founder Elon Musk said his company “might have a prototype” of the truck in 2019.
Old-line car manufacturers such as Ford (NYSE: F) and General Motors (NYSE: GM) have also been at work developing electric vehicle technology for years, of course. Some of those efforts have involved partnering with tech businesses and other automakers, such as Honda’s (NYSE: HMC) $2.75 billion investment in GM’s Cruise subsidiary late last year.
Beyond replacing gasoline-powered motors with electric ones, the other major technological development predicted to reshape the auto industry is autonomous vehicles.
Efforts by tech companies like Alphabet (NASDAQ: GOOGL), through its Waymo division, and Uber to develop self-driving vehicle technology are well-known, but Amazon may be indicating it plans to get in on more of the action.
The Seattle-based e-commerce behemoth was among the participating investors in a $530 million funding round announced by Aurora, a Silicon Valley-based autonomous vehicle technology company, earlier this month.
Amazon owns a fleet of planes, and its investment in Rivian could be a signal that Amazon envisions making trucks with electric motors part of its shipping and delivery network. (The company said last month it’s testing a small electric vehicle for “last-mile” deliveries in a neighborhood near its headquarters.)
Currently, Amazon works with several delivery partners, which use their own trucks and cars to ferry orders from Amazon distribution centers across the U.S. to their destinations.
Sven Beiker, managing director of Silicon Valley Mobility, a Palo Alto, CA-based consultancy, says investments in companies like Rivian by Amazon suggest the company may use more electric vehicles—potentially ones owned by Amazon or one of its subsidiaries—to ship and deliver orders, rather than vehicles sold by outside manufacturers.
Amazon could be “getting ready for the next chapter, which might involve an integration of a larger part of the logistics/transportation part [of its network], and eventually drones,” Beiker says.
Xconomy Detroit/Ann Arbor editor Sarah Schmid Stevenson contributed to this report