Rivian is an electric vehicle startup created by R.J. Scaringe and headquartered in Plymouth, Michigan — halfway between Detroit and Ann Arbor. It also owns the former Mitsubishi factory in Normal, Illinois. Soon after its founding, it attracted large investments from Amazon and Ford, raising a total of $2 billion altogether from a variety of sources.
Now it has raised a further $2.5 billion in a funding round led by T. Rowe Price. According to TechCrunch, participants in the latest capital raise included Soros Fund Management, Coatue, Fidelitity, and Baron Capital Group. Existing shareholders Amazon and funds managed by BlackRock also joined the round. No board seats were added as a result of the new investments.
The money will be used to prepare the factory in Illinois for the start of production for the company’s R1T electric pickup truck and its R1S SUV later this year, with deliveries to customers set to begin in 2021. The factory will also manufacture 100,000 electric delivery vans for Amazon. The first of those vehicles is also supposed to begin early next year.
In a statement after the latest funding round closed, Scaringe said, “We are focused on the launch of our R1T, R1S and Amazon delivery vehicles. With all three launches occurring in 2021, our teams are working hard to ensure our vehicles, supply chain and production systems are ready for a robust production ramp up. We are grateful for the strong investor support that helps enable us to focus on execution of our products.”
A side note to all this happy talk is a recent Autoline report claiming the company is moving most of its operations in Michigan to its tech center in Irvine, California — a move that apparently has riled a number of Rivian employees in Michigan. The Golden State may be inhospitable for Elon Musk, but it still offers the highest concentration of software engineers anywhere in the world.
When asked about the move by Autoblog, a spokeperson for the company said, “Of Rivian’s 2,300 employees, approximately 1,000 are based in California and 750 in Michigan, and we are consolidating some engineering teams to our locations in California to improve workflows and reduce environmental impact from travel. We’ve recently completed an expansion at our Michigan location and it will remain an important presence for us. We are also committed to creating a vibrant and inviting manufacturing presence in Normal, Illinois, where all Rivian vehicles will be produced. As we grow, we’ll keep evaluating and evolving our footprint and geography.”
One thing that is not exactly clear is what Ford is getting for its $500 million investment in Rivian. There were rumors that Lincoln would build an electric SUV on the Rivian skateboard chassis, but that project was cancelled. It was also assumed that Rivian would play a major role in helping Ford develop its first electric pickup truck, but those plans also seem to be on hold. Nevertheless, the ties between Ford and Rivian remain strong, says Autoblog. Alexandra Ford English, Ford’s director of corporate strategy, joined the Rivian board of directors earlier this year.
Cash Is Flowing To Other EV Companies, Too
According to The Verge, Fisker has raised $50 million recently to help it get its Ocean electric SUV into production. The money comes from Moore Strategic Ventures, headed by Louis Bacon. That’s more than triple the amount Fisker Inc. raised previously from the venture capital arm of Caterpillar and the family behind oil drilling company Schlumberger. A source tells The Verge that Fisker is considering its own IPO, no doubt energized by the recent astounding success of NIO and Tesla on Wall Street, both of which have more than doubled in value so far this year despite the ravages of the coronavirus on the new car market.
Henrik Fisker has been around the block and down the electric car road before, having introduced his ill fated plug-in hybrid car, the Karma, back in 2012. That car suffered from disastrous build quality and severe battery issues. The company went bust and its assets were purchased in bankruptcy by Wanxiang, which rebranded the company as Karma and introduced a much more modern version of the original car it now calls the Revero.
The Verge also reports Karma has secured $100 million in new financing from unnamed investors and is looking to raise $300 million more. Bloomberg reports the company would like to sell shares to US private equity firms, which would make its car more attractive to government fleets.
NIO bridged its economic troubles early this year by securing backing from companies owned by the Chinese government and Lucid has weathered the economic storms by selling a majority interest to the Saudi sovereign wealth fund for $1 billion.
Everybody seems to think electric cars are going to unlock mega profits in coming years and that has made lots of investors open their wallets to invest in electric car companies recently. Not all of them will succeed, of course, and there will be tears as some of those investors see their money evaporate. Those who put money into Faraday Future and Byton are already regretting their decision. No one has a crystal ball. Invest cautiously or not at all, and as my old Irish grandmother liked to say, “Never bet more than you can afford to lose.”