Rivian pulls $350 million in financing round
The electric car startup Rivian has received another investment of 350 million dollars. The fresh capital comes from Cox Automotive, a subsidiary of the media company Cox Enterprises. This is the third financing round this year.
Cox Automotive will also appoint a representative to Rivian’s Board of Directors, the company announced. In addition to the investment, both companies will explore “opportunities for partnerships in service operations, logistics and digital commerce”.
Let’s remember that the US startup surprised many industry experts last year when it presented its all-electric R1T pickup with impressive performance data at the LA Auto Show. Just one day later, Rivian presented the R1S, a corresponding electric SUV. Both models are expected to go into production at the end of 2020 at prices starting at 69,000 dollars (pickup) and 72,500 dollars (SUV), respectively.
Cox Automotive owns almost 30 brands, including leading new and used car dealers in the USA such as Autotrader, Kelley Blue Book, Pivet, RideKleen and Manheim. Rivian wants to take advantage of this car dealership expertise to “provide a consistent customer experience across our various contact points,” as Rivian founder RJ Scaringe puts it. “Cox Automotive is an excellent partner for us because of its global presence, its service and logistics capabilities and its technology platform for retail.”
Sandy Schwartz, the Cox Automotive president, was enthusiastic about “Rivian’s unique approach to building an electrified future and being part of the positive impact its products will have on our roads and the world around us”.
This is Rivian’s third investment announcement this year following a $700 million investment round led by Amazon in February and a $500 million investment by Ford in April, bringing the total investment this year alone to over $1.5 billion.
The deal with Ford could also lead to Rivian assembling Ford’s electric cars based on the start-up’s platform at Rivian. At least that was what Ford CEO Jim Hackett hinted at in August. The concept of the Rivian platform and its business case obviously made a lasting impression on Hackett. “They all teach us different things, and the platform can be streamlined years later,” the Ford CEO said in the interview. “Rivian is a very special thing that teaches us to bring together not only the powertrain but also the architecture with which the ECUs (electronic control unit) and other things are connected”.
While Rivian should benefit from the Ford deal mainly financially (and temporarily from better utilisation of its factory), Rivian’s end-customer business will especially benefit from the agreement. Not only Tesla but also the example of many other newly established car brands (e.g. Infiniti), shows how difficult it can be to build up a working dealer and service network. So it remains exciting to see what opportunities Rivian and Cox Automotive will find in their collaboration.