Amazon-backed EV Startup Rivian Raises $2.6 Billion Led By T. Rowe Price

author: Eric Walz   

The fully-electric Rivian R1T pickup truck.

Rivian, the electric vehicle start-up backed by Amazon and Ford Motor Co announced Tuesday said it closed on a $2.65 billion investment round led by T. Rowe Price as the company moves closer to production of its R1T fully-electric pickup and R1S SUV.

Other participants in the round included Fidelity, Amazon's Climate Pledge Fund, Coatue and D1 Capital Partners, as well as several other existing and new investors, according to the company. 

The investment announcement is Rivian's first in the new year 2021. The company's post-money valuation is now over $25 billion, according to a person familiar with the company.

"We have been eagerly anticipating the arrival of 2021, and with it, the exhilaration of Rivian starting to deliver its revolutionary products to customers. It is invigorating for us to continue our journey with such a talented, mission-driven team building a robust organization for the long term," said Joe Fath, T. Rowe Price portfolio manager.

Rivian, founded in 2009 by CEO Robert 'RJ' Scaringe, is one of most well funded electric vehicle startups to emerge since Tesla. The Michigan-based EV company has raised roughly $8 billion since 2019 as it looks to compete in the pickup truck and SUV segment that's currently dominated by U.S. automakers Ford and General Motors. 

The highly profitable category is one of the biggest segments in the U.S. auto market. Rivian's battery-powered pickup truck and SUV will give Ford and GM some new competition for the first time. Tesla is also launching a futuristic looking electric pickup called the Cybertruck.

In December 2019, Rivian announced it raised $1.3 billion. Seven months later in July 2020, T. Rowe Price led Rivian's $2.5 billion investment round. At the time, the funding was Rivian's second big investment round.  Prior to that, Rivian raised at least $1.5 billion.

In April 2020, Rivian announced a $500 million investment from Ford Motor Company and announced that two companies would collaborate on a future EV program.

In addition to building the R1T and R1S, Rivian is also developing electric delivery vans with Amazon. The e-commerce giant plans to add up to 100,000 Rivan electric vans to its fleet. Amazon plans to put into service 10,000 of Rivian's electric vans as early as 2022.

"This is a critical year for us as we are launching the R1T, the R1S and the Amazon commercial delivery vehicles. The support and confidence of our investors enables us to remain focused on these launches while simultaneously scaling our business for our next stage of growth," said Scaringe.

Amazon's electric delivery van built by Rivian. Amazon plans to add up to 100,000 of the electric vans to its fleet.

In November, Rivian announced it joined a new lobbying group called the "Zero Emission Transportation Association" (ZETA). The organization's focus is on advocating for national policies to promote the use of zero-emissions electric vehicles, including light, medium and heavy-duty commercial trucks by 2030. Rivian's rival Tesla also joined ZETA.

Rivian is one of only a few electric vehicle startups that owns a former auto factory. The startup purchased a shuttered Mitsubishi Motors auto plant in Normal, Illinois in 2017, which is fairly close to the home of the U.S. auto industry in Detroit. 

Mitsubishi Motors closed the plant in Normal, Illinois in 2015, putting the facility up for sale after it decided to stop manufacturing vehicles in the U.S. and instead focus on the Southeast Asia markets.

Rivian's factory in Illinois is set to become the next major auto assembly factory reconfigured to produce electric vehicles. The Illinois factory is currently undergoing renovations.

The other is GM's Factory ZERO, Detroit-Hamtramck Assembly Center. Factory ZERO, which first opened in 1985, is being retooled to become GM's premier electric vehicle plant, where the automaker will build many of its future EVs. The upcoming Hummer EV, which will compete with electric vehicles from Rivian, will be built there.

Even though Rivian has secured billions of dollars of funding, the EV startup still faces an uphill battle to lure buyers away from gas-powered trucks and SUVs from Ford and GM.

Ford has dominated the pickup truck segment for over 40 consecutive years with its F-Series pickup, which means that new competitors like Rivian will face an uphill battle for market share. But owning a former auto factory and a lucrative contract with Amazon for electric delivery vans gives Rivian a big advantage, especially for fully-electric commercial vehicles.

Rivian plans to launch its R1T pickup in June. Prices start around $75,000.

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.