World’s closely guarded secret
Meet the man quietly building the Tesla of Trucks. With aboard, he is making huge inroads
BY DEFINITION, the time of the world’s richest man is pretty valuable. But late last year, Jeff Bezos sought out a 36-yearold entrepreneur named RJ Scaringe and spent the better part of a day in Plymouth, Michigan, at the company he founded, Rivian.
Bezos got a preview of Rivian’s electric pick-up truck and sports utility vehicle and liked what he saw. Not long after his visit, Amazon led a $700 million (R9.8 billion) investment in Rivian. Two months later, in April, Ford Motor invested $500m.
All told, Rivian has raised $1.7bn without selling a single truck or SUV.
If you have not heard of Rivian before, that was intentional. Until recently, it was in stealth mode, operating out of unmarked buildings and making few public announcements. But no longer. By the end of 2020, Rivian intends to begin producing premium electric vehicles, with a greater range than anything on the road today.
Rivian is promising to do for trucks what Tesla did for luxury cars.
That’s where the similarities between the two electric vehicle makers end. Even as Tesla and its brash chief executive, Elon Musk, made headlines by setting and falling short of some audacious goals, Scaringe and Rivian have spent a decade fine-tuning their designs.
Walking around a former Mitsubishi plant in Normal, Illinois, Scaringe points to where stamping presses will churn out car parts like fenders and doors. But he is hoping to do more than sell cars. Scaringe wants to dispel myths he thinks still surround electric vehicles.
“We have a number of untruths – a truck can’t be electric, an electric car can’t go off road, it can’t get dirty, it can’t tow and truck buyers don’t want something that’s environmentally friendly,” he said. “These things are fundamentally wrong. Electrification and technology can create a truck that’s incredibly capable and fun to drive.”
In addition to developing advanced battery systems, Rivian has also designed a skateboard-like chassis that it plans to sell to other carmakers. For Ford, investing in Rivian is a way to leapfrog the competition and get new ideas from a start-up as it and other automakers race to prepare for an electrified future.
Amazon has been mum about its interest in the company, but Rivian’s vehicles could help the retail giant reduce its carbon footprint as it builds its own distribution network.
The automobile business has fearsome barriers to entry and aspiring players have to ante up billions of dollars just to be dealt into a game where profit margins tend to be slim.
Scaringe is likely to need billions more to get as far as Tesla, which itself struggled to expand production in 2017 and 2018. But the demand for electric vehicles is there – Tesla built more than 250 000 cars in 2018.
Scaringe founded Mainstream Motors, the business that would later become Rivian, in 2009 after completing a doctorate in mechanical engineering at MIT.
His timing was odd to say the least – the financial crisis had made investors skittish and the bankruptcies of General Motors and Chrysler did not bode well for an automotive start-up.
Family and friends provided the initial funding and Scaringe and his father both took out second mortgages to raise money.
Rivian takes its name from Florida’s Indian River, close to where Scaringe grew up in Melbourne, Florida.
Scaringe and a small team worked for two-and-a-half years to create a fuel-efficient sports car, but he ultimately pulled the plug in 2011. “In my heart and soul, I knew I wasn’t answering the fundamental question of why the world needs this company to be successful,” he said.
It was a painful moment. At one point, the team had worked through four nights in a row, said Roman Mistiuk, now a senior interior designer at Rivian. “When the vehicle was done, RJ said we’re switching.”
The small band of employees stuck with him and when Scaringe moved the company to Michigan, they followed him north. At one point, Scaringe, his girlfriend (now wife) and several Rivian staff members lived together in a house in the Detroit suburbs.
Except for sleeping, they talked cars day and night. “It was breakfast, lunch and dinner, 24/7,” Scaringe said.
Early backing from Saudi and Japanese investors provided the runway for Rivian to develop its electric vehicle designs.
“Fortunately, my personality is such that I never lost the confidence I could do it,” he said. “That doesn’t mean I always knew how I was going to do it.”
As much as he loved cars, Scaringe said he was deeply troubled by their role as a cause of climate change, air pollution and other ills. “I wanted to have an impact and the highest impact approach was to build the company myself,” he said.
Scaringe, an outdoors type who enjoys mountain biking, wants his cars to be able to go off-road. Rivian trucks and SUVS can operate in a metre of standing water. A ballistic liner protects the battery pack so drivers can take the vehicle into rugged terrain without worrying that rocks and other objects could penetrate the undercarriage.
Rivian’s R1S SUV bears a resemblance to a Range Rover, while the flatbed in its R1T pick-up is shorter than the best-selling Ford F-150. “Rivian’s products are not really meant to be work trucks,” said Stephanie Brinley, principal automotive analyst with IHS. “They aim to be lifestyle products, capable but meant for recreational use.”
The R1S will directly challenge Tesla’s SUV, the Model X, and although Musk has said he will introduce a pick-up, Tesla has yet to unveil one
The R1S and the R1T will start at around $70 000 and cost more than $90 000 for fully loaded models that can travel up to 643km on a full charge. Rivian has received tens of thousands of reservations from buyers who have made deposits of $1 000 each.
“Targeting the premium pick-up and SUV market in the US was smart,” said Sam Abuelsamid, principal auto analyst at Navigant Research. “Those are the kind of vehicles Americans want to buy, as opposed to a compact car or midsized sedan.” Profit margins are higher, too, especially for luxury models.
As different as Scaringe is from Musk, the two share some qualities. Scaringe is a control freak who weighs in on everything from the colour of bathroom tiles to the lighting in the assembly plant.
Rivian employees describe Scaringe in worshipful, almost mystical tones, echoing the kind of adoration that Musk inspires. Designers laud his sophisticated design sensibilities. Brand experts cite his marketing know-how.
“I’ve spent years trying to decode RJ and predict what he wants,” said Larry Parker, creative director at Rivian. “He’s moving so fast. Sometimes we don’t know where he is going. To keep up with RJ is not easy.”
Jeff Hammoud, Rivian’s head of design, said Scaringe was the reason he was willing to leave his job as the top designer at Jeep. “It’s amazing how much he is able to absorb,” Hammoud said.
But there are idiosyncrasies beneath the surface. Scaringe usually dresses in blue (“Blue is my favourite colour”), occasionally flannel. On his birthday, many employees wear flannel on what’s known as “Dress Like RJ Day”.
To provide fresh food for his employees, Scaringe wants to turn the grassy areas that surround the plant in Normal into a farm. “The goal is ‘let’s make this the best place to eat in town’,” he said.
Asked about Rivian’s rivalry with Tesla, Scaringe would not disparage the competition. He credits Tesla for changing the perception of electric cars as “boring and slow or glorified golf carts”.
While Tesla has failed to reach its own lofty production targets in recent years, Scaringe is only promising about 20 000 to 40 000 vehicles in 2021, the first full year of production.
But before that Rivian will have to create assembly lines for its vehicles and batteries, which Tesla’s problems have shown is difficult. The company will also have to establish a retail operation to get its vehicles to buyers.
Says Scaringe: “Hindsight has a lot of advantages, one of which is that everything looks crisper and cleaner, but at the time you don’t know the path forward. So you’re going up this infinitely steep climb.”