Rivian – the wise guy “standing on the shoulders” of Tesla: Choose a segment that does not compete with Elon Musk, both receiving huge investment and taking lucrative orders from Amazon

Standing on the shoulders of giant Tesla

In January 2017, Rivian acquired the Mitsubishi Motors-owned plant in Normal, Illinois and its manufacturing facilities for $16 million, which became Rivian’s primary North American manufacturing facility. .

To be closer to key suppliers, Rivian moved its headquarters to Livonia, Michigan and began building an ecosystem of products related to autonomous electric vehicles.

Before switching to trucks and SUVs, their first model was oriented as an R1 sports car, a mid-engine hybrid coupe style for the US market.

Rivian’s first two new product lines include an electric 5-seater pickup truck and an electric 7-seater SUV. Both vehicles were announced at the LA Auto Show in November 2018. Additionally, Rivian has announced its intention to produce electric delivery vans in three different sizes, capable of carrying 14 packages, 20 or 25 m ³ .

Rivian’s business strategy is to find success from the very path that Tesla has identified and developed, which is electrification of vehicles. The proof is that in the past 5 years, Tesla has gone from producing 50,000 cars a year to 10 times more than last year.

Rivian and Tesla are both working on self-driving car technology – a huge trend that is reshaping the auto industry. However, Rivian is different from Tesla in the product segment. Tesla has so far been selling sports sedans, a vehicle that is less popular with consumers. Rivian’s focus on trucks and SUVs accounts for 75% of the passenger vehicle market in the United States.

The approach is considered wise as Rivian will not have to go head-to-head with the Tesla giant.

Last year, before the pandemic hit, it said it planned to produce about 20,000 pickups and SUVs by 2021 and about 40,000 by 2022. The company said it already had orders for all the vehicles. which they are expected to produce this year. Rivian truck and SUV, starting at $67,500.

Get a lot of great investments

Sumitomo Corporation made a “strategic investment” in Rivian in December 2017. In May 2018, Rivian continued to receive $200 million in debt financing from Standard Chartered Bank, bringing the total raised to $450 million.

In February 2019, Amazon officially invested $ 700 million in Rivian, along with an order for 100,000 electric trucks. Two months later, it was Ford Motor Company’s turn to invest $500 million. Cox Automotive invested $350 million in September, bringing its total raised in 2019 to $1.5 billion.

On the list of investors for Rivian, there is one notable point: Amazon is both a strong investor and a large customer. Other investors including BlackRock, Fidelity, T. Rowe Price and Ford Motor all have plans to build vehicles based on Rivian’s technology.

Next, Rivian raised billions of dollars more from investment funds with famous names behind. During this period, the number of employees of the company also increased dramatically from 100 people to more than 3,000 people within 4 years from 2016 to 2020.

As of 2020, the company has four production and business headquarters. Headquartered in Irvine, California, specializes in vehicle engineering, engine and battery system design and development, as well as commercial functions. A facility in Plymouth, Michigan, focused on supply chain and accounting. One in Palo Alto, California, develops self-driving technology and data. The 240,000-square-foot plant in Normal, Illinois, manufactures vehicle components such as battery packs.

Rivian plans to develop a network of public charging stations by 2023. It also says it will offer a mix of fast chargers and slower chargers under specific conditions, and also sell home chargers.

In the second half of 2021, Rivian begins production of Amazon delivery trucks with an order quantity of 10,000 units to be delivered by the end of 2022.

This past August, Rivian filed for an initial public offering (IPO) with the ambition of raising the company’s value to $80 billion.