Michigan-based EV startup Rivian has announced a massive new $1.3 billion financing round led by T. Rowe Price — one that includes existing investors like Amazon and Ford. It’s the fourth time Rivian has raised money this year, following an Amazon-led $700 million raise in February, a $500 million investment from Ford in April, and $350 million from Cox Automotive in September — despite a market that is shying away from big investments in startups for a number of reasons.
The new money puts Rivian at over $3 billion in total funding since it was founded in 2009, meaning it’s now comfortably ahead of all the other US-based electric vehicle startups that have tried to follow in Tesla’s wake. Add in the commercial partnerships Rivian secured with Amazon and Ford as part of their investments, and it is arguably in a better position to succeed than some of the most high-profile foreign EV startups, too.
Rivian has suffered far less drama than EV startups like Faraday Future, Lucid Motors, and Byton for a few reasons. One, it remained remarkably quiet following its founding. Rivian kept its employee count low while it focused on developing its core technologies (like its battery pack and electric powertrain), existing for nearly nine years on just a few hundred million dollars from Saudi Arabian auto distributor Abdul Latif Jameel and Japanese conglomerate Sumitomo. At the same time, Rivian locked down a manufacturing facility — a former Mitsubishi plant in Normal, Illinois — long before announcing its vehicles.
It wasn’t until the company broke cover in 2018 that it finally showed off the design of those two all-electric vehicles: a pickup truck called the R1T and an SUV called the R1S. The startup also started talking about its plans in detail, like how CEO and founder RJ Scaringe wants to create the “Patagonia” of electric automakers.
Now, the EV startup is roughly one year away from kick-starting production of its electric pickup truck and SUV, each of which will start at around $70,000. Rivian has promised the top spec of both vehicles will be able to travel more than 400 miles on a full battery, and the company has outfitted each with tons of features tailor-made for outdoor and off-road use to reach those Patagonia-type customers.
Investors were impressed with the approach and the results, as evidenced by how some have taken active stakes in the growing company. Amazon tapped Rivian to build 100,000 electric delivery vans by 2024. Ford, meanwhile, will use Rivian’s technology to power what is expected to be an all-electric Lincoln SUV due in 2022.
Rivian will face plenty of direct competition. A handful of other companies are trying to be early to market with an electric pickup truck, like Ford, which is working on an all-electric version of its popular F-150 pickup that’s expected to hit the market in 2021. (A hybrid version is due next year.) General Motors has also promised an all-electric pickup around the same 2021 time frame. Tesla, of course, recently revealed its own take on an electric pickup truck in the form of the Cybertruck. And most electric vehicles that are currently available — save for the Tesla Model 3 — are SUVs.
But Rivian was already putting its growing war chest to use before the new investment. The startup hired a slew of new employees following the November 2018 debut of its vehicles, as The Verge reported earlier this year. Many of them came over from troubled EV startup (and would-be rival) Faraday Future, including the well-regarded team that helped develop GM’s first mass-market electric car, the EV1. Others hailed from Ford, McLaren, and Tesla. Rivian even named former longtime Apple VP Mike Bell as its first CTO.
With heaps of talent onboard, two vehicle designs essentially locked in, and manufacturing and design centers up and running, Rivian can now take the $1.3 billion in fresh capital and put it toward the biggest hurdle for any automaker: production.
This is all a remarkable contrast to the struggles of other EV startups. Faraday Future and Lucid Motors, the two most well-known startups in the space, essentially took the opposite approach by putting their electric vehicles on display early and often despite not having anywhere to build them.
Faraday Future famously planned to build a $1 billion factory in the Nevada desert, and even passed on the same factory that Rivian now occupies, as The Verge previously reported. But it ultimately abandoned that idea in favor of retooling an old Pirelli tire factory closer to its California headquarters. The struggling startup has already spent around $2 billion and is somehow still $850 million away from starting production on its luxury electric SUV.
Lucid Motors only just broke ground this month on what will eventually be a $700 million factory in Arizona — a project that was put on pause for more than a year as the startup searched high and low for funding. Lucid Motors did finally raise $1 billion in late 2018, but that money came from Saudi Arabia’s sovereign wealth fund, and even then, it’s still not likely enough to carry it into production.
Rivian also has something Faraday Future and Lucid Motors have sought both publicly and privately: a deal with a major automaker. Faraday Future has held discussions with Fiat Chrysler, as The Verge reported last month, but it’s unclear if a deal will ever be reached. Lucid Motors CEO Peter Rawlinson has also spoken about his desire to supply EV tech to other automakers, but nothing has materialized.
Rivian is arguably in a better position to chart its own course than some of the foreign EV startups that have global ambitions. China’s Byton is supposedly in trial production of its first electric SUV, though it only got to this point by striking a deal with state-owned automaker First Auto Works — an agreement the startup’s co-founder and former CEO said resulted in interference from the Chinese government.
And while Chinese EV startup NIO already has two electric SUVs on the road, that’s only because it decided to have another state-owned automaker build its vehicles. The Tencent-backed startup pays that manufacturer for every vehicle it builds, which has in turn made it harder for the startup to generate any money to put back into its business. NIO has now lost more than $5 billion in just five years of existence, and this year had to borrow $200 million from its own CEO and Tencent.
Rivian’s investments will certainly come with their own strings, as all do, and the startup now has promises to keep to the likes of Amazon and Ford. But that’s not the same as giving a government a say in the business, and it could ultimately be worth the trade-off, as those deals have helped elevate the startup’s status from obscure player to one that was mentioned in practically every article about the Cybertruck. Trying to build a new automaker from the ground up is a herculean task, as Tesla has proved with its repeated trips to “production hell.” Rivian could very easily run into its own problems, but it continues to prove it has a much better view of the road ahead.