Electric car maker getting $700 million Amazon investment
A potential rival to Tesla in electric cars just got a big boost from Amazon.
The online retail giant is leading a $700 million investment in Rivian, a Michigan company that is developing a battery-powered pickup and an electric SUV.
Rivian announced the new round of investment Friday, offering few details but saying it would remain independent.
Founded in 2009 by an MITtrained engineer, R.J. Scaringe, Rivian previously raised about $500 million from Sumitomo, a Japanese conglomerate known for its tire division, and Abdul Latif Jameel, a Saudi industrial group. Those investors also took part in the new investment round, though the companies did not provide details about how much money they put in.
The deal is the latest example of how the auto industry is being reshaped by new technologies and nimble companies that have raced ahead of many traditional carmakers. While General Motors, Ford Motor and others are scrambling to introduce new electric vehicles, Tesla has become by far the leading seller of electric cars in the U.S. Waymo, a division of Google’s parent company, Alphabet, is considered by some analysts to be the leading developer of autonomous vehicles.
“We’re inspired by Rivian’s vision for the future of electric transportation,” Jeff Wilke, Amazon’s chief executive for worldwide consumers, said in a statement. “R.J. has built an impressive organization, with a product portfolio and technology to match.”
An Amazon spokeswoman declined to elaborate on the thinking behind the Rivian investment.
Since 2015, Amazon has been building out its own logistics network, one that is a “global, end-toend network covering all transportation modalities,” Morgan Stanley described in a research note last month. It owns dozens of planes and has a shipping operation, not to mention trucks, rail and other ways to deliver products and packages. The company spent more than $27 billion on shipping last year.
Amazon relies on contract drivers in passenger cars and trucks to make many last-minute deliveries quicker than it can through delivery partners such as the Postal Service. Last month, the company said it was testing a delivery device called Scout, which is the size of a large ice chest and can “roll along sidewalks at a walking pace,” near Amazon’s Seattle headquarters.
The company ordered 20,000 Mercedes-Benz vans last year for its delivery partners to shuttle Amazon products to consumers, but those vans run on diesel, a fossil fuel. The company has also been facing pressure from employees looking to reduce its environmental impact, particularly in its logistics operations.
And a week ago, Amazon made a “significant” investment in Aurora, a California startup that is developing self-driving technology. Aurora is led by Chris Urmson, who previously headed Alphabet’s autonomous car effort.
“For Amazon, this small investment is a good way to enlarge their bet on the EV automotive market without having to tool up a plant to find out if it will fly,” said Matt DeLorenzo, senior managing editor of Kelley Blue Book. “Over time, the Rivian investment could give Amazon a starting point to own and operate an in-house package delivery business.”
Rivian first showed its truck and SUV at the Los Angeles Auto Show in November. The key feature of each is a chassis that is shaped like a skateboard and includes all the components that propel the vehicles.
The company claims that its pickup, the R1T, and its SUV, the R1S, will be able to go up to 400 miles on a full charge.