Amazon Leads $700 Million Bet on Electric Truck Maker Rivian
(Bloomberg) -- Amazon.com Inc. led a $700 million equity investment in Rivian Automotive LLC, the electric pickup and SUV maker preparing to deliver its first vehicles next year.
The backing from Amazon will bolster Michigan-based Rivian’s plans to bring an electric truck to market in late 2020. Rivian remains in talks with General Motors Co. about the largest U.S. automaker making an investment or collaborating another way, people familiar with the matter said.
The support of the world’s leading online retailer signals potential for a partnership on delivery vehicles down the road. Chief Executive Officer R.J. Scaringe said in his first interview since reports of Rivian’s talks with Amazon and GM surfaced earlier this week that he was seeking companies that could help the electric-vehicle maker grow.
“We will bring on additional partners, but less because of capital reasons and more because of a need to have strategic relationships as we scale towards our broader vision,” Scaringe said ahead of the announcement Friday.
Discussions between GM and Rivan are ongoing, according to the people familiar with the talks, who asked not to be identified because an agreement hasn’t been reached. It’s unclear whether the potential deal would include GM taking an equity stake.
As its e-commerce business and Prime fast-delivery service have grown, Amazon has sought out ways to boost its own delivery capacity and reduce its reliance on shipping partners including United Parcel Service Inc. and FedEx Corp.
On Friday, XPO Logistics Inc. said a major customer cut back on about $600 million in sales, a shortfall analysts attributed to Amazon. XPO’s shares plunged as much as 21 percent, the biggest intraday drop in two months.
Scaringe, 36, said Rivian wasn’t in dire need of funds because backers led by Japan’s Sumitomo Corp. and Saudi auto distributor Abdul Latif Jameel Ltd. are fully committed to seeing the company succeed. Rivian didn’t name GM in its statement Friday, which said that existing shareholders participated along with Amazon.
Rivian has now raised about $1.15 billion. Its battery-powered R1T pickup and R1S sport utility vehicle drew rave reviews at the Los Angeles Auto Show in November and are expected to deliver as much as 400 miles of driving range.
In backing Rivian, Amazon is making a second auto investment in short order. The company was among the participants in a $530 million funding round for self-driving startup Aurora Innovation Inc. announced this month.
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