Electric vehicle startup Rivian closes $1.3b investment round

Electric vehicle startup Rivian closed a $1.3 billion investment round, led by fund manager T. Rowe Price but also including existing investors online retailer Amazon.com and No. 2 US automaker Ford Motor Company.

The investment round, which also included BlackRock, is the fourth this year for Rivian and positions the Plymouth, Michigan-based company as one of the better-financed players in a crowded EV manufacturing market where Tesla Inc is the most established player.

“This investment demonstrates confidence in our team, products, technology and strategy,” Rivian Chief Executive R.J. Scaringe said in a statement.

Electric vehicles still make up only a small piece of the global automotive market. While Tesla is the best-known maker, China and Europe are pushing automakers to roll out EVs, and Ford, General Motors and others have announced plans to spend billions of dollars developing the vehicles.

Founded in 2009, Rivian plans to build an all-electric pickup truck, the R1T, and the companion R1S SUV, starting in late 2020. Both models are based on a Rivian-designed “skateboard,” a chassis that bundles electric motor, batteries and controls and can accommodate a variety of body styles. Prior to the announcement, Rivian had raised $2.2 billion from investors, according to investor website PitchBook, and was valued at an estimated $5 billion to $7 billion.

The company’s total valuation in the wake of the latest investment round was not immediately clear.

Rivian said no new board seats were added as a result of the latest investment.

T. Rowe Price has placed other bets in the auto sector. It is a large Tesla shareholder and also has invested in GM’s majority-owned Cruise self-driving division. T. Rowe Price also invested, along with Amazon, in self-driving car software startup Aurora and British online food delivery company Deliveroo.

“T. Rowe Price is excited to invest in Rivian as it moves the innovation frontier forward with its compelling sustainable transport solutions for both consumers and businesses,” T. Rowe Price Growth Stock Fund Portfolio Manager Joe Fath said Monday in an emailed statement.

Amazon, which has relationships and deals across the auto industry, led a $700 million investment round in Rivian in February. The e-commerce company also ordered 100,000 electric delivery vehicles from Rivian. The first Amazon vans will be built at a former Mitsubishi Motors plant in Normal, Illinois, starting in 2021.

Amazon declined to comment. Ford invested $500 million in Rivian in April and plans to help it begin production in Normal in 2020.

“We want to maintain a meaningful value in the ownership and future of that company,” Ford spokesman T.R. Reid said about Rivian.

In November, sources told Reuters a battery-powered Lincoln SUV, due in mid-2022, would be the first Ford vehicle to be built on the Rivian skateboard.

Cox Automotive Inc, owner of the Autotrader online automobile market and Kelley Blue Book car valuation service, invested $350 million in Rivian in September.

Meanwhile, a battery-powered Lincoln SUV, due in mid-2022, will be the first Ford Motor Co vehicle built on a custom electrified chassis that resembles a skateboard, which was developed by Ford-backed startup Rivian, according to several people familiar with the programme.

The all-wheel-drive Lincoln SUV could compete against Rivian’s R1S, an electric sport utility vehicle slated to go into production in early 2021 that will be priced from $72,500. Both models will use Rivian’s so-called skateboard, a flexible platform that combines electric motors, batteries, controls and suspension.

Ford declined to comment. Rivian did not respond to a request for comment.

The new Lincoln, which carries the internal program code U787, also could compete with premium offerings from others, including General Motors, which plans to introduce at least two new electric SUVs by 2023, one for Cadillac and one that could revive the Hummer name, sources have said.

Ford invested $500 million in Rivian this year and plans to help it begin production next year at a former Mitsubishi plant in Normal, Illinois.

When Ford made the investment, it said it would use Rivian’s skateboard to develop its own electric vehicle, but did not disclose details.

It is not clear where Ford intends to build the Lincoln SUV, which will be among the first of several battery-powered utility vehicles planned for Ford’s premium brand in North America and China, according to supplier sources familiar with those programmes who asked not to be identified.

Reuters