Rivian In Talks With GM & Amazon For Billion-Dollar Truck Investment Deal

FEB 12 2019 BY ERIC LOVEDAY 73

See! We told you electric pickup trucks were hot.

And no make is hotter right now than Rivian with its R1T electric truck and R1S SUV.

The electric pickup truck maker will get a huge boost if this deal involving both Amazon and General Motors goes through. One of the biggest concerns with these startup automakers is a lack of support and funding. Not only would Rivian benefit immensely from having a major, legacy automaker on its team, but Amazon’s finances and resources could make this deal even more outstanding.

As Reuters exclusively reports:

Amazon.com Inc and General Motors Co are in talks to invest in Rivian Automotive LLC in a deal that would value the U.S. electric pickup truck manufacturer at between $1 billion (775 million pounds) and $2 billion.

GM is no stranger to electric and electric trucks. It offered an electric pickup back in the 90s, but that was then and this is now. More recently, GM hinted at a full-size electric truck, but it didn’t provide a timeframe. This deal could speed up the development of new Chevy and GMC electric pickup trucks as well.

For Amazon, this could be some sort of delivery vehicle idea, or perhaps just a strategic investment to make money. On the other hand, Amazon could apply its sales and marketing prowess to the situation. Not to mention its dominating online presence, well-known user platform, and multitude of physical locations and employees.

As for Rivian, the electric automaker is believed to be well funded already, but this is billions and that’s a ton of money to assist with production and development of future electric adventure vehicles. CEO RJ Scaringe has reminded in several recent interviews that it takes a massive amount of money to get a new automaker off the ground and producing. This deal could be the ticket, and if it all pans out, it could be truly incredible as far as partnerships go.

Reuters reached out for comment. GM issued this statement:

“We admire Rivian’s contribution to a future of zero emissions and an all-electric future.”

But Amazon and Rivian did not immediately respond to requests for comment.

Just this morning, there were unsubstantiated reports of a potential deal between Tesla and GM, which have since been proven false. However, this report by Reuters seems more realistic and plausible. The fact that GM responded to a request for comment is compelling, though it’s clear the automaker didn’t want to reveal any details at this point.

Developing story…

This could be a game-changer for Rivian, and so we’ve started a thread to discuss it in depth on the InsideEVs Forum. Come join us!

Source: Reuters

Categories: Rivian, Trucks

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73 Comments on "Rivian In Talks With GM & Amazon For Billion-Dollar Truck Investment Deal"

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Considering there was a rumor published last night about GM and Tesla hooking up for a EV pickup truck, this news with Rivian is definitely a “compelxifier”.

I personally think the Tesla – GM story is BS. This makes so much more sense.

A site desperate for clicks.

Yet here you are, ironic as always.

I was talking about cleantecnica, moron.
Seems like my original comment was edited.

He’s a “moron” because he responded to what you actually said?

Well, there appears to be a moron in the discussion here, all right…

When we saw that GM-Tesla story this morning, the writing staff was extremely skeptical…

Turns out that we were right to think it was crazy, since Tesla flatly denied it. (Although as a fan of GM and Tesla electrics… having them team up would be amazing. )

The Rivian story is far more credible. GM did not deny it, and it looks likely that Cleantechnicas source might have gotten their electric automakers crossed!

Tesla != Rivian. XD

i would be surprised if GM did not end up simply buying Rivian.

If the deal “values Rivian at between $1B and $2B”, then it isn’t a lot of extra cash going in. Pretty good investment though. Based on Wiki, they had previously raised $450MM, and have 700 employees. This sounds like maybe $200MM cash for a ~10% stake.

GM should simply increase their investment plans in Rivian substantially, in order to become a substantial shareholder of Rivian.

Perhaps it would be even better if GM would take Rivian completely under its wings?

@Benz said: “Perhaps it would be even better if GM would take Rivian completely under its wings?”
————-

That would be handing Rivian an anchor in the deep end of the pool.

@ CDAVIS

“That would be handing Rivian an anchor in the deep end of the pool.”

I’m not completely sure what you mean by that.

But if you meant to say that Rivian would become the most important brand within GM, then I think that you are right about that.

And if you meant to say something else, then please explain your view.

It sounds like he’s saying that having GM run Rivian would sink the company.

Well, GM did go bankrupt at one point–though that was 10 years ago, so it isn’t exactly the same company now. Plus they probably have some factories they could offer.

@Bemz said: “…I’m not completely sure what you mean by that…”
————

What I meant by “That would be handing Rivian an anchor in the deep end of the pool” is:

If Rivian was acquired by GM then Rivian would one way or another be subject to the many legacy constraints of a traditional car maker (independent dealer franchise network, large organizational bureaucracy, labor union interests, existing competing development projects, etc…). Rivian would greatly loose its ability to be agile. It would be like handing someone an anchor at the deep end of a pool and asking them to swim.

Yes in theory Rivian would be allowed be run “independently” yet have access to all the benefits of being associated with a large established traditional car maker (existing manufacturing facilities, existing retail & service channels, etc…) but in practice it never works that way.

Having said all that, from a practical survival perspective Rivian’s owners/shareholders may be thinking swimming with an anchor is a better alternative for their investment interests than alone climbing the high mountain to production.

would they be forced to use union workers and sell through GM’s existing dealers? If so, yes that would kill Rivian.

They should probably have young children in “developing ” countries build them for like $1 an hour and no benefits…..

I have not seen any evidence of any auto maker hiring children to work on an auto assembly line. Not even in third-world countries.

Have you?

But in past articles on Rivian, Rivian has always been open to talks with the UAW. Which is a good thing seeing their factory is in IL.

Yup. GM acquiring Rivian may be good for GM’s EV expertise, but certainly not good for the EV market, nor for Rivian itself. Unlike an independent Rivian, one owned by GM wouldn’t be in any hurry to offer compelling BEVs which would compete with GM’s gasmobile SUVs and other light truck gasmobiles.

Healthy markets are ones which offer consumers real choices.

Perhaps it would be even better if GM would take Rivian completely under its wings?

NOOOO. GM brand has the worst image. The moment Rivian fall under GM will lost a lot of potential buyers.

GM for trucks is a is a very good brand. Probably second after Ford, and perhaps the premiere one for high end trucks with their Denali range.

Not completely under their wings, but if a structure could be devised that allowed GM to help fund Rivian and also get good revenue sharing for GM without being considered “officially” part of GM it might allow the Rivian/GM partnership to avoid their (GMs) dealerships and sell directly.

I’m not sure how feasible this is, but it would be good for GM to find some backdoor way to be able to sell directly. We know they would like to but are hamstrung by legacy dealership agreements/laws.

It’s entirely feasible. Car companies take stakes in other companies fairly often. Toyota has a stake in Mazda and Subaru for example but does not own either company.

But at what point in an ownership stake do the dealership obligations kick in. If it was as simple as just investing in a new car company without legacy dealership contract I would have expected they would have taken that route by now.

An intellectual property sharing arrangement between GM and Rivian would be a good thing. Anything beyond that, any sort of partnership which would give GM partial or full control over Rivian, would be effectively the end of Rivian as a real competitor in the emerging EV market.

From a financial stand point it would not make all that much sense to buyout Rivian.

Think about it for a moment, if say GM gains 10-15% ownership with $250-300m. That allows them to essentially have a seat in the board. That means that they have access to Rivian R&D which often is far more innovative and cheaper than say do it inhouse.

That means that GM can use that information to build its own EV-pickup.

And if everything goes south? Well they lost $250-300m, thats quite a bit less than say fail miserably on Chevy Silverado-EV pickup which would most likely cost Billions on R&D and capex.

Risk vs reward makes far more sense to do it like this.

What I am curious is, what exactly does Amazon gain from this? I mean if they want to spread Alexa and AWS, isnt there far more efficient ways? Such as direct partnerships with car manufacturers?

Having a seat on the Board doesn’t give GM access to technical details or the right to Rivian patents.

Amazon is interested in autonomous vehicles and this could be a platform for their software/hardware. Plus they may use Rivian vehicles for parcel deliveries, giving their delivery partners preferential access to Rivian vehicles or maybe even designing a commercial version of Rivian vehicles.

Thinking this would also help with distribution, service, etc… Cadillac dealerships (since they are the ‘EV’ brand now) or some such being Rivian hubs, that would def solve quite a hurdles that were/are left

Having Cadillac dealers distribute Rivian vehicles is handing Rivian an anchor in the deep end.

Having Cadillac handel Rivian service and parts would not be a fate worse than death. It would be all gravy to Cadillac dealers.

Distribution should be direct or through Rivian’s own dealers at worst. Partnering with franchisees that don’t currently have an ICEv dealership.

Rivian has said where they can they will have their own distribution outlets. But where they can not, they will use “partners’ to distribute their vehicles.

“Having Cadillac dealers distribute Rivian vehicles is handing Rivian an anchor in the deep end.”

Would it? A lot of auto dealers handle more than one brand of automobile. So far as I can see, that’s a win-win situation for every company involved.

Having gasmobile dealers handle sales of plug-in EVs of their own make (other than the Prius plug-in models) has generally not worked so well, for various reasons discussed at great length. There are definite conflicts of interest there.

But if an auto dealer is offering two different badges, and advertising to potential customers of both brands, then that’s a different situation.

Oh heck yes! This makes a lot of sense. I love what Rivian as done but one thing we haven’t heard yet is how they are going to do sales and service. If they hook up with GM that would be an instant win.

This would be an answer for GM to look for something to replace Cadillac. I am sure that the Cadillac dealerships would be enthusiastic on this idea because they want young buyers, not their current/typical demographic.

But a lot of Cadillac dealerships have GMC truck franchise also under one roof.

Sounds different in the US, but all the GM dealers I know of in Alberta sell GMC, Chevy, Cadillac and Buick vehicles from the same location.

The Rivian / Mary Barra / Jeff Bezos EV Truck!

A cool $2 Billion should get it going!

Headline is all wrong. That’s valuing the company at $1B-2B, not an investment of $2B. Most likely it’s for maybe 10% of the company and puts it at a post-money valuation of $2B.

We don’t really know what the stake amount is. It could be 30 or 40% even. We just don’t know.

Rivian should be cautious when dealing with GM.
“Timeo Danaos et dona ferentes”
“Beware of Greeks bearing gifts”

NPNS! SBF!
Volt#671 + BoltEV + Model 3

Definitely interesting. It also fits well for GM to partner with a company that brings something new to the EV table (i.e., EV truck and related drivetrain). Ford partners with VW to get into the EV game. Now what does FC do? They are kind of left out in the cold.

I guess the one piece of the puzzle will be to see if the battery and drivetrain efficiency problems can be solved by the non-Tesla automakers. I haven’t seen any of the legacy auto makers really compete with Tesla as far as batteries go and if Tesla’s recent battery acquisition pans out, all these companies may still be quite a ways behind. Never mind the charging infrastructure problem.

Per “Now what does FC do?”
… Partner with Tesla?

Two ways to look at this. Not long ago it would be assumed that a large investment in a new electric start up might be just to buy it out and bury it. But now GM needs to accelerate its EV truck business and making a deal with Rivian to sell and service Rivian trucks at Cadillac dealerships would be highly beneficial to GM. Only downside would be dealer salesmen being anti-EV, but I think any dealer that didn’t get on board would soon learn the error of their ways.

I don’t know if GM needs to accelerate its EV trucks. You make it seem like we’re at the end of the game and this is a hail mary to try to win. The game hasn’t even started at this point. I could see this as a way for GM to offer a high-end truck. Maybe Rivian becomes Cadillac. GM could help them lower cost with their supply chain.

Maybe, since GM Dropped Saturn, under which Dealerships the EV1’s were leased out from, this could replace that exit, as an entrance?

“The game hasn’t even started at this point.”

Obviously GM does not agree, since it has committed to converting its entire Cadillac line to plug-in EVs.

Pretty sure he’s talking about EV trucks, not EV’s in general.

Point of order. The article doesn’t NOT say billion dollar investment. It says the valuation of the company is between 1 and 2 billion. That’s a drastically different thing.

GM beat Ford and Dodge to it!

Of course this is the route Rivian should take. I was talking about this 2 months ago – hypothetically. Glad to see it may come to fruition – no matter who buys in. It will speed up their progress and market penetration. Go Rivian!!

If GM is involved it will get screwed up.

Amazon as an independent dealership. Product sold by Rivian, fullfillment by Amazon. Delivered to your door.

And what about servicing? Oh, you have to return it to Amazon…. Doh!

IMHO, Rivian should not get involved with GM or Amazon. GM will just take all the technology and implement it badly in their trucks after all the techy people in Rivian leave in their droves.
Amazon are on a mission to become totally entwined in our lives. We could get to the point where everything we do is associated with Amazon like it or not. Then we are beholden to their ‘company store’ which will be worth more than the Federal Government.
Jut my $0.02 worth of useless thoughts.

Yes because GM knows nothing about trucks or EV’s – unlike Rivian. /s

“Delivery to your door”. They could put a trailer hitch on those little USPS trucks and tow it to your curb. ;-).

I am still waiting for the self-driving car to deliver itself. I figure the first step in this process is when Tesla has the cars drive themselves off the assembly line and load themselves onto car carriers and ships.

So where is Ford in all of this? Ford needs this truck to show the world it plans to have a future beyond milking that F-series cash cow.

No reason Ford can’t continue to milk the F series cash cow, just with an EV engine.

I can see it now: Amazon Basics Electric Pickup.

Glad I have Prime!

There would be only one winner.
(Clue? Not Rivian)
They’ve survived this long, (Their investors have stayed this long!) why would they give away all their work, to simply, ultimately, become a GM “model” rather thank be a brand in their own right?
Stay independent!

The Pickup and SUV are both nice looking but the cost will limit it to a small market.

Amazon has deep pockets and so investing in EV seems logical.
Apple has the money to invest and should invest in Tesla. Smartphones are a commodity now and sales are slowing. Investing in Tesla would allow there engineers ( some who left Tesla for Apple ) and deep pockets to help keep Tesla in the lead in EV space.
If Apple doesn’t diversify and look towards new markets they could go the way of Eastman Kodak.

I don’t think there’s any truth of GM “investing” in Rivian. $1-2 Bln to GM is peanuts (as a point of reference, it’s in the middle of a multi year program to revitalize Cadillac to the tune of $12 Bln). If they really wanted Rivian’s trucks, they could buy them outright. Why “invest”? Why strengthen a competitor, even if you get a little technology back?

GM knows how to engineer an electric truck. That’s not holding them back. If this was a tie-up with a battery manufacturer, it would make more sense.

Well I just read GM’ propulsion unit is now designers engineers etc. are now 70% EV and 30% ICE.

I’m trying to remember the name of the other Electric Vehicle start up that was in Nevada.
Apparently it was going to be a Tesla killer.
I think it’s out of business now. Can’t remember the name.

Faraday Future

It’s good that you can’t remember the name. That sham company needs to be forgotten, and the sooner the better. Companies like that pose a danger of giving EV startups a bad name.

Anything with GM would be highly suspect, it would be cheaper for GM to buy their way in and then drag their feet or just shelve the competition…..VERY bad move Rivian.

I’m not sure what technology Rvian has that GM would want. GM has spent billions in development and is far ahead of Vivian in production of EVs.

In regards to Amazon, I would think Workhorse Trucks would be a better outfit to purchase than Rivian. They already make and sell electric delivery vans specifically designed for the last mile delivery capability that Amazon really needs. Workhorse also has a good shot to be the propulsion supplier for the $6.3 billion USPS Next Generation Delivery Vehicle program which should be announced in the next few months. Amazon would be a great partner as Workhorse needs to secure financing to start production of the USPS van which would also be a perfect fit for Amazon.

Workhorse is a low-volume company which, to date, has made a profit only on making bodies for commercial vehicles like step vans. I wish only success for Workhorse, but they are just not set up for the kind of volume production which Rivian plans.

Yes, GM has experience at making actual production PEVs (Plug-in EVs). What GM has no experience at is producing an EV that is as profitable for them as an average one of their gasmobile models. If GM is serious about converting its entire Cadillac line to PEVs, then it might well benefit from the EV tech that Rivian has developed over years of R&D.

Amazon.com investing in Rivian appears to be a very promising sign.

But GM investing in Rivian looks like a giant step towards a buyout. I hope that doesn’t happen. Legacy auto makers need real competition from several new EV makers, not just Tesla alone.

What exactly is GM getting out of this? Technology? Given that they have produced electric vehicles already , would this mean that they don’t believe in their own tech? Rivian had the same issue most legacy auto companies have – source of cheap automotive grade batteries. I can’t comment on Amazon’s interest but I’m really surprised by GM being interested in Rivian. How does this really help them get faster to an electric truck production in meaningful quantities. It’s really mind boggling that the second company to reach the credits limit, by producing cars that cistomers seem to like and be well engineered is now so all over the place with electric vehicle strategy.
And btw what does that say about Bob Lutz’s favorite truck venture if GM is not even interested 😉

Rivian has a contract with a supplier for battery cells. I do not know the extent of the supply, but they do have a supplier. If I remember correctly, it is not one of the usual players, like LG Chem.

Considering Rivian claimed their main aim was not to build vehicles, but to sell platforms to other manufacturers this would make sense in many ways.

It would be very interesting if GM were the first company to invest in the platform so they could introduce it to their existing product lines (rather than sell the R1T or the R1S). A Silverado and Sierra, or Colorado running on this platform would invariably be cheaper and have more exposure than Rivians trucks could make in the next few years (due to the existing brand image, distribution network and economies of scale GM can bring to the table).

If that’s the case there’s no reason that GM and Amazon don’t have to be completely separate contracts, both interested in licencing the platform.