Rivian Automotive, founded by 36-year-old Robert "R.J." Scaringe, is coming up fast in the rearview mirror of high-profile electric carmaker Tesla Inc. (TSLA). Largely unknown outside of automotive circles, the privately-held maker of premium electric sport utility vehicles (SUVs) and pickup trucks has yet to sell a vehicle. But Scaringe, nonetheless, has raised major funding from some of the most respected names in Corporate America: a total of $1.7 billion, including $700 million from Amazon.com Inc. (AMZN) and $500 million from Ford Motor Co. (F).
Amazon CEO Jeff Bezos, the world's richest person, visited Rivian's Plymouth, Michigan headquarters last fall, and was highly impressed when he met with Scaringe, who founded the company in 2009 after earning a Ph.D. from MIT, The New York Times reports. SUVs and pickups are among the most profitable segments of the consumer vehicle market, and Rivian's vehicles are promising a leap in both durability and range per battery charge.
Access to Rivian's skateboard platform, which has a separate electric motor for each wheel, is a key motivation for Ford's stake. Ford plans to spend $11 billion in the next few years on developing electric vehicles, more than 1.4 times its total capital spending for 2018, per Barron's.
The table below summarizes key facts about Rivian:
- Rivian plans to start making electric SUVs and pickups in late 2020.
- Its top financial backers are Amazon.com and Ford.
- Rivian is designing vehicles tough enough to go off-road.
- It promises far more range per battery charge than existing electric cars.
Rivian's SUV model, called the R1S, looks similar to the Range Rover, made by Land Rover, and competes with Tesla's Model X. Rivian's electric pickup truck model is called the R1T and has a shorter flatbed than the Ford 150, Ford's top selling pickup truck, the Times notes. Elon Musk has indicated that Tesla will offer a pickup, but has not released a design.
The R1S SUV may pose the biggest threat to Tesla. Depending on the choice of battery pack, the Rivian R1S promises to deliver from 240 to 410 miles of driving between charges, per InsideEVs.com. That's much farther than the Tesla Model X, which can be driven only 237 to 295 miles. Both vehicles offer 3 rows of seating, but InsideEVs estimates that the R1S is slightly more roomier, given that its roofline does not slope like the Model X.
The R1S and the R1T are expected to have selling prices starting at $70,000 and reaching $90,000 for fully-loaded models, per the Times. Rivian indicates that it has tens of thousands of reservations, for a deposit of $1,000 each.
Who Is R.J. Scaringe?
While earning his doctorate at MIT, Scaringe worked with top engineers from major automakers at the prestigious Sloan Automotive Laboratory, per Bloomberg. After rebuilding vintage Porsches as a youth, Scaringe began dreaming of founding his own car company at age 18, the Times says. “I wanted to have an impact, and the highest-impact approach was to build the company myself,” he said, regarding his concerns about climate change and air pollution.
Scaringe is determined to shatter conventional views about electric vehicles. “We have a number of untruths--a truck can’t be electric, an electric car can’t go off road, it can’t get dirty, it can’t tow, and truck buyers don’t want something that’s environmentally friendly,” Scaringe told the Times. “These things are fundamentally wrong. Electrification and technology can create a truck that’s incredibly capable and fun to drive,” he added.
An avid outdoorsman and mountain biker, Scaringe insists that his vehicles can go off road, navigating 3 feet of standing water, and with a hardened undercarriage that protects the battery pack from damage due to rocks and other objects. That view runs counter to that of some industry experts. “Rivian’s products are not really meant to be work trucks,” counters Stephanie Brinley, principal automotive analyst with IHS Markit, per the Times. “They aim to be lifestyle products, capable but meant for recreational use,” she elaborated.
'The Right Team Of People'
In the past year, Rivian has more than doubled its workforce to 750, according to The Verge. Dozens of hires from Ford, Tesla, and U.K.-based McLaren Automotive Ltd., plus about 50 from a struggling California-based rival, Faraday Future, are filling key positions. Longtime Apple Inc. (AAPL) VP Mike Bell, who played a leading role in launching the iPhone, is now Rivian's first chief technology officer (CTO). Head of design Jeff Hammoud previously held the same position at Jeep, the Times notes. "Putting the right team of people together [is the] absolute core of our business," Scaringe told The Verge in 2018. "As an organization, I spent a huge amount of my time thinking about the way we operate, the way we make decisions,” he added.
Conservative Production Plans
While Tesla CEO Elon Musk is noted for making, and missing, bold production and sales forecasts, Scaringe is more conservative. Rivian is targeting 2021 as its first full year of production, planning to make between 20,000 and 40,000 vehicles in that year, the Times reports. However, given that Tesla built more than 250,000 cars in 2018, the potential market for Rivian eventually may be at least as large.
Even with Ford's and Amazon's backing, Rivian faces major obstacles. "The capital requirements are enormous and ceaseless,” Mike Ramsey, an analyst with tech research firm Gartner, told the Times. For Rivian, “Manufacturing is the biggest challenge,” Ford CEO Jim Hackett said in a news release. The next few years will prove whether Rivian can produce at a competitive price the kind of high-mileage, durable SUVs and trucks that founder "R.J." Scaringe envisions in the ruthlessly competitive global car market.