Electric-Truck Maker Gets Fresh Funds -- WSJ
September 11 2019 - 3:02AM
Dow Jones News
Electronic-vehicle startup Rivian gets $350 million as it
readies first pickup
By Mike Colias
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 11, 2019).
Rivian Automotive, an electric pickup-truck startup backed by
automotive and technology giants including Amazon.com Inc., has
landed $350 million from privately held Cox Enterprises as it
prepares to launch its first vehicle next year.
Cox and Rivian will look to partner in areas such as vehicle
maintenance and digital sales, Rivian Chief Executive RJ Scaringe
said in an interview. Atlanta-based Cox operates its namesake cable
company as well as dozens of auto-related businesses, including
consumer website Kelley Blue Book and car-auction company Manheim
Group.
Cox's investment brings Rivian's valuation to about $3.5
billion, a person familiar with the matter said. The companies
declined to comment.
Founded a decade ago, the suburban Detroit-based startup has
drawn attention in automotive circles since late 2018 after
revealing a futuristic-looking electric pickup truck and a boxy
electric sport-utility vehicle. The vehicles are expected to go on
sale in the U.S. by the end of 2020, each priced around $70,000
before electric-vehicle tax credits.
The latest financing adds to the more than $1 billion Rivian has
already raised from investors this year. Ford Motor Co. in April
invested $500 million in Rivian and said it would co-develop an
electric vehicle using the startup's technology. That deal came
after discussions between General Motors Co. and Rivian unraveled,
people familiar with the matter have said.
Earlier this year, Amazon led a $700 million financing round in
Rivian. Amazon has a prototype delivery vehicle slated to use
Rivian's electric system, people familiar with the project said.
The companies declined to comment.
Traditional auto companies are pouring investment into
battery-powered vehicles, prompted in part by tightening tailpipe
emissions regulations in China, Europe and elsewhere. Auto makers
globally have committed more than $200 billion to develop hundreds
of electric models in coming years, consulting firm AlixPartners
estimates.
The shift has spawned dozens of electric-vehicle startups, many
patterned after Tesla Inc.'s success with pricey electric sports
cars. But relatively few startups have taken aim at electric pickup
trucks and large SUVs, heavier vehicles that will require larger
batteries. Detroit's auto makers generate the bulk of their profits
from big pickup trucks and SUVs.
Rivian's trucks use a so-called skateboard layout, with a large
battery under the floor and electric motors powering each wheel,
enabling the vehicle to travel around 400 miles per charge. The
"lifestyle" vehicles are aimed at outdoors-minded buyers and will
have off-road capability lacking in today's electric vehicles, Mr.
Scaringe said.
"We have to reset expectations" of what electric vehicles are
capable of, he said.
The company plans to assemble its trucks at a former Mitsubishi
Motors Corp. plant in Normal, Ill., which it bought for about $16
million in 2017.
Rivian will have competition. Tesla has said it also will target
the lucrative market for big American pickup trucks. In a tweet
Saturday, Tesla Chief Executive Elon Musk said the company likely
will unveil an electric pickup truck in November.
Ford is developing a battery-powered version of its top-selling
F-150 pickup truck separate from its project with Rivian. GM also
has said it has an electric pickup truck in the works.
Mr. Scaringe said Rivian plans to sell its trucks directly to
consumers, without a network of dealerships. It may lean on Cox or
others for expertise in areas like vehicle maintenance and
logistics, he said.
Cox's Manheim division operates a large auction network where
dealers buy and sell used cars. Working with an upstart like Rivian
will give the company a better view into future automotive trends,
said Sandy Schwartz, president of Cox Automotive.
"We provide services from the time [cars] come off the assembly
line to the time they go to the junkyard," Mr. Schwartz said in an
interview. "We need to understand what that's going to look like
five, 10, 15 years from now."
Write to Mike Colias at Mike.Colias@wsj.com
Corrections & Amplifications Ford has said it will develop
an electric vehicle with Rivian. An earlier version of this story
said the companies are working on an electric pickup truck. (Sept.
10, 2019)
(END) Dow Jones Newswires
September 11, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Apr 2023 to Apr 2024