The 10 years-old American startup, Rivian announced on Monday, December 23, 2019, that it received $1.3 billion from a round of investment funding for the manufacturing of electric vehicles (EV), which is projected to start launching in the US in late 2020. The investment was primarily funded by T. Rowe Price, a US publicly-owned assets management firm. Other existing investors included Amazon.com Inc. (Amazon), BlackRock Inc. (BlackRock), and Ford Motor Co. (Ford).
Previous Funding for Rivian
The EV manufacturing startup has already received several rounds of investments in 2019 from the existing investors. December’s round of investment is the fourth funding from Rivian’s investors of this year and the company has been receiving a great deal of capital raising from these big investors.
Amazon, an e-commerce retailer, entered into a deal with the startup worth $700 million in February 2019 and has placed an order of 100,000 EVs from the company for its delivery services. As per the deal between the two, Rivian has agreed to manufacture Amazon’s first vans which it will begin producing in 2021. The US’ leading automobile manufacturer, Ford also invested $500 million in the startup in April 2019 to compete with other well-established manufacturers, Tesla.
Cox Automotive Inc., the owner of the Autotrader online automobile market and Kelley Blue Book car valuation service, also invested $350 million in Rivian in September 2019. The startup plans to start introducing its EVs globally in 2021. According to investor website PitchBook, “Prior to Monday’s announcement, Rivian had raised $2.2 billion from investors, and was valued at an estimated $5 billion to $7 billion.”
Planning for the New Venture of EVs
Despite the increase in the number of investors looking to invest in EV companies, EVs constitute a small share of the global automotive market. While Tesla has slightly gone ahead with the plan of manufacturing EVs, many automobile manufacturers such as General Motors Co. (GM) have shown interest in investing in these vehicles. Capitalists are keeping an eye on China and countries in Europe. T. Rowe Price, Tesla’s largest shareholder, funded extensively in companies such as GM.
Rivian plans to start producing its models of an all-electric pickup truck, the R1T, and the companion R1S SUV, late 2020. According to the Reuters report, “These models will be based on a Rivian-designed “skateboard,” a chassis that bundles electric motor, batteries, and controls and can accommodate a variety of body styles.”
T. Rowe’s Stock Fund Portfolio Manager, Joe Fath stated, “T. Rowe Price is excited to invest in Rivian as it moves the innovation frontier forward with its compelling sustainable transport solutions for both consumers and businesses. ”Ford spokesman, T.R. Reid put after the deal on Monday, “We want to maintain a meaningful value in the ownership and future of that company,”
According to a report by Reuters in November 2019, “A battery-powered Lincoln SUV, due in mid-2022, would be the first Ford vehicle to be built on the Rivian skateboard.” Rivian’s CEO, R.J. Scaringe expressed, “This investment demonstrates confidence in our team, products, technology, and strategy.” As a response to the question on the existing board members, Rivian officials stated, changes are not likely to take place soon.
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