Rivian rolls out electric pickup
PLYMOUTH, MICHIGAN: Rivian Automotive Inc plans to debut its all-electric pickup truck at the Los Angeles auto show this week, and its founder and chief executive officer exudes optimism about his desire to do for the US auto industry’s most lucrative segment what Tesla Inc did for luxury cars. Not everyone is so sanguine.
R.J. Scaringe, Rivian’s 35-year-old CEO, said he and his financial backers believe that demand for electric pickups is “massively underserved.”
Rivian intends to begin selling its R1T, the pickup it will debut in Los Angeles, in the autumn of 2020.
That would not make Rivian the first to the US market with an electric pickup. Cincinnati-based truck maker Workhorse Group Inc is developing an electric pickup that is slated for production in 2019.
But while Workhorse is aiming to sell its pickup to utilities and municipalities for use on limited routes, Rivian says its pickup is aimed at consumers.
Rivian’s truck will have a range of up to about 400 miles, which would be the longest among its three different battery packs.
Scaringe sees the US pickup market, which accounts for the bulk of global profits for the Detroit Three automakers, as ripe for change.
“What we’re talking about here are cars that don’t drive particularly well, don’t handle particularly well, have fuel economy that’s really quite bad,” he told reporters at Rivian’s headquarters in Plymouth, Michigan.
Rivian has not disclosed prices for its truck, but Scaringe says it will start at just under $70,000 before federal tax credits for the entry-level model. A stripped-down version with the most powerful battery pack will sell for less than $90,000. Current large, luxury pickup trucks can sell at that price or higher.
Many auto industry officials and analysts are sceptical that electric pickups can sell in large numbers unless battery technology vastly improves in driving range and cost.
Buzz about electric pickups vastly outweighs their near-term significance to the US market, because making a pickup electric can compromise other key attributes of such vehicles, such as loadhauling capability.
Rivian’s truck will offer a payload of 1,760 pounds and a towing capacity of 11,000 pounds — attributes more comparable to the Detroit Three’s mid-sized trucks than to best-selling large trucks such as the Ford F-150 or GMC Sierra.
That will put Rivian’s truck in a tough place as it lacks the power and payload of the larger models, but will cost more than the mid-sized trucks.
“A hybrid makes more sense,” said Sam Fiorani, vice president of global vehicle forecasting at Auto Forecast Solutions.
The Detroit Three automakers have not jumped into the market for electric pickups. Tesla Inc CEO, Elon Musk, told investors in August that an electric pickup “is probably my personal favourite for the next product from the company’’, though he has spoken only in general about a potential launch, saying that it would happen “right after” Tesla’s Model Y, which the company has targeted to start production in 2020.
Ford Motor Co has promised a hybrid F-150 pickup by 2020 and hinted at a fully electric model some day. General Motors Co’s CEO, Mary Barra, has said the US automaker has given a “tiny bit” of thought to developing allelectric pickups.
Fiat Chrysler Automobiles NV has a hybrid electric-gasoline version of its Ram pickup. Japan’s Toyota Motor Corp said it hoped to make electric options on all models available by 2025.
For the most part, the US pickup market leaders are doubling down on petroleumfueled models such as FCA’s new Jeep Gladiator mid-sized pickup that will be officially unveiled in Los Angeles.
The Gladiator is aimed at consumers who want a “lifestyle” truck that has carlike amenities in the cab, and can haul recreational “toys” such as jet-skis, campers or dirt bikes.
Rivian, which last year bought the former Mitsubishi plant in Normal, Illinois, for $16 million to build its truck, will also likely face financial challenges and the need to raise more money as it moves into production, if Tesla’s experience is any guide.
Tesla has raised billions of dollars in financing — including secondary share
offerings and bond sales — as it has struggled to ramp up production.
Rivian’s financial backers include Saudi auto distributor Abdul Latif Jameel Co Ltd
(ALJ), Sumitomo Corp of America and Standard Chartered Bank.
ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million.
Like the new Jeep Gladiator, Rivian is targeting recreational customers.
Autotrader analyst Michelle Krebs says those types of customers tend to prefer the mid-sized trucks like the Toyota Tacoma and Chevrolet Colorado, but they are much less brand loyal than owners of the fullsized trucks.
But Scaringe says that Rivian sees an advantage in its truck’s foundation, a “skateboard” that packages the vehicle drive units, battery pack, suspension system, brakes and cooling system all below wheel height to allow for more storage space and greater stability due to a lower center of gravity.
The skateboard could be used for other models including an SUV.
Scaringe says Rivian’s goal is to reach about 50,000 sales a year by 2025. Rivian also plans to sell the skateboard to other automakers.
And Scaringe said Rivian has another business strategy: Most of its revenue will not come from selling vehicles, but eventually selling experiences like renting vehicles for a weekend trip.