Published: Thu, February 14, 2019
Economy | By

GM, Amazon to invest in Tesla rival Rivian?

GM, Amazon to invest in Tesla rival Rivian?

According to Reuters, both GM and Amazon are in discussions to take minority stakes in the electric pickup and SUV maker and that a deal could be finalized by the end of the year.

Both Amazon and GM have their in-house electric vehicle efforts in the works, but neither company has jumped into the market of electric pickups yet. It would be a major boost for the Plymouth, Michigan-based startup, which aspires to be the first auto maker to the USA market with an electric pickup.

GM issued a statement that said, "We admire Rivian's contribution to a future of zero emissions and an all-electric future".

The company was founded in Florida in 2009 by MIT mechanical engineering degree-holder R.J. Scaringe to develop a hybrid electric sports vehicle, but shifted its focus to electric trucks a few years later. Additional funds could give the company the additional push it needs to get its trucks to production and for it to form a retail and support strategy-which, in Rivian's case, may involve a direct sales model somewhat like that of Tesla, combined with traditional dealership networks that would "own" the service and support.

Rivian plans to begin selling its R1T pickup truck in the fall of 2020. The company was founded in 2009 by CEO R.J. Scaringe.

Unlike rival automakers, Rivian is not trying to develop its own self-driving technology.

Big automakers, including GM, have not jumped into the market for electric pickups thus far. GM has said one of the first fully electric Cadillac models using the new platform would hit the market around 2022. "While we believe electric vehicle pickups are not the near-term future for GM (demand isn't there at a profitable price point), it is their long-term future", Evercore ISI analyst Arndt Ellinghorst wrote in a note.

Amazon has also invested in self-driving vehicle startup Aurora Innovation Inc, in a $530 million funding round announced last week. Should the deal follows through, they will be Rivian's first major US venture investors, joining existing shareholders including Saudi Arabia's Abdul Latif Jameel and Japan's Sumitomo Corporation. ALJ has agreed to provide nearly $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million.

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