Electric Truck Startup Rivian Announces a New $2.5 Billion Investment Round Led By T. Rowe Price

author: Eric Walz   

The Rivian R1T fully-electric pickup truck

Electric truck startup Rivian is emerging as one of the hottest new electric vehicle startups since Tesla and the company has a big war chest to prove it.

The Plymouth, Michigan-based company announced on Friday a new $2.5 billion investment round led by T. Rowe Price. The new funding round is the second big investment round led by Rivian. In Dec 2019 T. Rowe Price led a $1.3 billion round in Rivian which also included BlackRock Inc.

Apart from its investments from T. Rowe Price, Rivian already secured major financial backing from e-commerce giant Amazon as well as the Ford Motor Company for its electric pickup truck and companion SUV. The new funding round brings Rivian's total investments to at least $6 billion, according to investor website Pitchbook.

Rivian, founded in 2009, is emerging as a major player in the EV space with its fully electric vehicles that will be built on the company's advanced electric skateboard platform.

The electric vehicle startup is following Tesla's lead in challenging U.S. rivals General Motors and Ford in the electric pickup and SUV segment, two of the most profitable categories for U.S. automakers.

Rivian plans to soon start building its all-electric R1T pickup, and companion R1S SUV. Both models will be built on Riivian's "skateboard architecture", which contains all of the vehicle's batteries and electrical components.  The innovative skateboard design can accommodate different body styles for more efficient manufacturing. 

Rivian is targeting a 400 mile range for its electric vehicles.  

As part of its investment in Rivian, automaker Ford was planning to use a Rivian-designed skateboard platform for future electric models, including the first all-electric version of the F-150 pickup and for an luxury electric SUV under Ford's luxury division Lincoln. However those plans have been put on hold due to the "current environment", Ford said in May.

General Motors and Ford currently dominate the truck market, including commercial trucks, but neither automaker has yet to introduce a fully-electric version of one of its truck models, which gives Rivian an advantage.

As part of its investment in Rivian, e-commerce giant Amazon, which led a $700 million investment in Rivian in Feb 2019 along with U.S. automaker Ford, plans to add Rivian's electric vehicles to its delivery fleet. Amazon ordered 100,000 electric delivery vehicles from Rivian, which it says is the biggest order of its kind to date. 

Amazon wants the Rivian electric delivery vehicles to be on the road as early as next year. By 2022, the e-commerce company aims to have 10,000 electric vehicles in its delivery fleet. 

E-commerce giant Amazon ordered 100,000 electric delivery vans from Rivian.

Rivian is also one of the few electric vehicle startups that own a former auto factory to build its electric vehicles. The company acquired a former Mitsubishi Motors Corp plant in Normal, Illinois in 2017 for $16 million and is converting the plant for EV production.

Rival electric truck startup Lordstown Motors also owns a former auto factory. The company moved into GM's former Lordstown, Ohio assembly plant and is also converting the plant to produce electric vehicles. 

GM announced its was closing the plant in Nov 2018 as part of a company-wide cost cutting move. However, rather than let the plant sit idle, GM helped Lordstown with financing to purchase the shuttered factory.

Rivian's latest investment round comes as Tesla's stock has soared to new heights. Tesla is now the world's most valuable automaker with a market cap of over $255 billion, taking the top spot from Toyota Motor Corp. 

Tesla's rapid rise has put focus on electric vehicles and other newcomers in the space planning to introduce their own electric models, including Nikola Motor, which just launched its U.S. IPO.

Nikola is building commercial fuel cell trucks for the trucking industry, but is also developing an electric pickup called the Badger, to compete with the best-selling Ford F-Series pickup and trucks from GM and GMC, as well as Rivian's R1T pickup.

Rivian's latest fundraising was joined by Soros Fund Management, Coatue Management, Fidelity Management and Research Company, and Baron Capital Group. Existing investors Amazon and BlackRock also participated in the round.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.