Detailed Elaboration On The Rivian, GM, Amazon Deal: Video

FEB 15 2019 BY STEVEN LOVEDAY 45

Will GM and Amazon’s huge investment in Rivian play out? Why does it make sense?

Our good friend Sean Mitchell has become a bit of an expert on Rivian. While many publications, including mainstream media, are just learning about the upcoming EV company, Mitchell has been covering it for some time.

He even enjoyed an exclusive visit to the company’s Michigan headquarters long ago, way ahead of the rest of us being invited to step inside. Moreover, as usual, Sean has done his homework in more ways than one, which included spending some time with the electric truck and electric SUV at their world debut in LA, in addition to securing an amazing interview with CEO RJ Scaringe in Aspen.

In the above video, it’s clear that Mitchell just heard the news about Rivian, GM, and Amazon. He happens to be in his car without his regular resources, but he provides a quick phone video to get his thoughts out. Check it out to give yourself a little background. However, you’re going to want to scroll down and pay closer attention to Sean’s followup video, which is more organized and includes the real meat and potatoes. Also, he provides a nice summary in the second video description below.

Video Description (above) via Sean Mitchell (AllThingsEv.info) on YouTube:

Initial thoughts: GM/Amazon in talks to invest into Rivian

Video Description:

Why the Rivian / GM / Amazon deal could be a win-win-win

What could Rivian get out of this deal?

  • Quick infusion of cash
  • Instantaneous street credibility that other new EV companies don’t have
  • Production prowess
  • Potential revenue from any licensing deal or vehicle sales
  • Potential for Rivian to be acquired by Amazon or GM in the future

What could GM get out of this deal?

  • A working partnership with a bad-ass, forward thinking EV company
  • Potential access to some of the best EV tech in the industry
  • A potentially competitive truck to compete against F150

What could Amazon get out of this deal?

  • A working partnership with a bad-ass, forward thinking EV company
  • Potential access to some of the best EV tech in the industry
  • Access to an EV fleet with autonomous ready features for deliveries
  • Alexa integration and associated revenue

What do you think? Will this ever really come to be? If so, is it a good idea, or will it only lead to issues. Share your thoughts with us in the comment section below.

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45 Comments on "Detailed Elaboration On The Rivian, GM, Amazon Deal: Video"

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I just hope GM’s goal is not the same as for the early Segway… invest, divert, make announcements and do nothing, to be sure there is no competition.. I’m more confident in Amazon’s involvement.
https://newatlas.com/segway-car-project-puma/11413/

Speaking of GM and 2009 :https://www.motortrend.com/news/gm-promises-14-hybrids-by-2012-we-id-the-potential-lineup-4659/

How about something more recent, like GM’s multi-billion dollar investment in Cruise Automation? They aren’t doing nothing there.

Amazon has ruined companies as well, like as a Smart Things user they bought out Blink and immediately pulled those devices off the open market Smart Things so there wouldn’t be future competition for their own proprietary smart offerings.

Or GM Venture’s $5 million investment in Bright Automotive circa 2010. Was it $5m down the drain, or was it to inact some control over Bright and their attempts to gather funding from the federal government?

GM did show off an Opel Vivaro plug in hybrid van in Germany circa 2011 using the Bright IDEA’s powertrain. Naturally, the van never materialized and Bright folded.

GM is funding legal attempts to stop Tesla from direct marketing. Seems a huge conflict of interest since this type of marketing is Amazon’s core business.

With tons of speculative cash to write off, I suspect GM would be more prone to invest money to kill competition rather than to help Rivian drive a stake into the ICE truck business that literally keeps GM solvent.

Bezos has motivation to challenge Musk, his rival in the space race. History does repeat. We remember Edison vs. Tesla. What drastic and devious measures Edison took to defeat his nemesis to electrify the world. Rivian has a major lead over Tesla in getting the first EV pickup truck to market.

Is this deal similar to the one that Tesla had in their early days with Toyota?

Another Euro point of view

Is Rivian CEO someone it is possible to work with ? It gets down to this sort of aspects ultimately.

In another article I saw, the accepted comic book alter ego of Musk is Tony Stark, which is commonly known. While Rivian CEO, RJ Scaringe, was listed with the comic book alter ego Clark Kent. So, they are trying to perform similar things, but by somewhat different methods.

The funny thing is that I think the roll-out of the European luxury EVs (Jag, MB, Audi…) is an indication of just how far behind the legacy car makers are in terms of producing a competitive EV. Let’s be honest, these companies have had 6 or 7 years to tear down the Model S and understand what it takes to build a competitive EV. Then look at the range and acceleration of something like the new MB. The 200 mile range, 6 second 0-60 and sub-130 mph top speed are sort of pathetic specs for an AWD car/SUV with an 80+ kWh battery. Those specs are barely competitive with the 60kWh Model S from 4 or 5 years ago. Never mind the total lack of autonomous/assisted driving capability. This makes me think of these cars as just a tweaked chassis with a battery and electric motor purchased from a vendor and slapped together as quickly as you can possibly design and build something as complicated as a car. It would be interesting to be a fly-on-the-wall at one of these companiy’s board meetings because the discussion probably centers around “who we can buy to get back in the game”. Tesla,… Read more »

The truth is Ford and GM plan to “grow” profit by shrinking to nothing as they lose marketshare.

I think the plan is to shrink to their core market competencies, which is good. Unless you start getting a disruptor to your core competency. An investment in Rivian could be a really great idea from GM’s perspective.

“…An investment in Rivian could be a really great idea from GM’s perspective….”

And a very bad idea for Rivian’s futre IMO.

Hard to say, either way we would be speculating at GM’s intent. GM has a lot of manufacturing expertise and supplier relationships that could greatly expedite and lower the cost of manufacturing the platform. It could also greatly speed up GMs electric pickup development by several years. Or, they could cause Rivian issue if they thought of them as competitive (but I don’t think they would invest in them if that were the case).

Ignoring range for a moment the claims about acceleration and top speed are rather far fetched.

You’ll notice both acceleration and top speed are in line with their ICE offerings, and offerings from other manufacturers. It’s likely to be a design decision rather than anything else. They’re SUV’s and they don’t need the 3.0 second 0-60 requirement that so many EV enthusiasts seem to believe is important (so important that only Tesla have this).

Tesla decided that acceleration was one of the most important parts of their MO. That doesn’t mean other more established manufacturers need to follow everything they do.

Did the Daimler & Toyota investments in early Tesla long term benefit Diamler & Toyota? …other than a TSLA stock sale profit?

If Daimler & Toyota could turn clock back they would likely not again make that Tesla investment if the knew to extent that investment would materially aid a future competitor. Back when Daimler & Tesla made the Tesla investment the all-electric EV segment was a PR play thing… today it’s significantly more than that.

Rivian is targeting GM’s most sacred cow… F-Series trucks. Why would GM in any way want to aid Rivian in that?

Anything less than GM purchasing controlling interest in Rivian makes no sense for GM… but often lessons are not learned.

Or perhaps Google will purchase Rivian or both Rivian & GM.

Some very big surprising plays will likely take place in the automotive space next 3 years.

When it takes the German Government to order you to compete with Tesla, with that knowledge the answer is different.

The F-150 is a Ford truck. You’re actually making the case for why GM might invest in Rivian…

@Luke said: “The F-150 is a Ford truck…”
—————-

Your correct… meant to say:

Rivian is targeting GM’s most sacred cow… Silverado truck is Chevrolet’s top selling vehicle and the second-best-selling vehicle in America only second to Ford’s S-Series trucks. Why would GM in any way want to aid Rivian In being a future truck competitor?

Because Rivian stated when they announced the truck that their main goal was to become a platform supplier, rather than an integrated car manufacturer.

I don’t think that a $100k goat roper SJW vehicle with a 4ft bed (can you even call that a truck in ‘murica?) will pose any market threat to a $40k Silverado. It’s about as much of a threat as the BMW i3 is to the 3 series (zero). This deal is weird since GM seems to already have a decent amount of R&D done in the EV field but with the relatively low dollar amounts discussed, it’s probably just FOMO investing (fear of missing out) and a reach around grab to keep Rivian out of the hands of any other auto makers (Tesla?).

@Aaron385 said: “I don’t think that a $100k goat roper SJW vehicle with a 4ft bed (can you even call that a truck in ‘murica?) will pose any market threat to a $40k Silverado…”
——————

$100k Tesla Model S was not much a threat to BMW 3-Series… then came Tesla Model 3.

Clearly Rivian has EV tech/patform that they have expressed interest in sharing.
GM is a manufacturing tech powerhouse – hydroforming, joining different materials (including welding steel to aluminum), lost form casting, etc. And they now have 5 empty factories.
GM also has relationships with Lyft, Maven and Cruise Automation.

Unfortunately, neither can design a decent looking front end. Maybe Amazon can “check” that box 😉

Amazon vs. Tesla is gonna be like Doctor Evil vs. Tony Stark

I may be missing something, but what’s so difficult about designing and creating an EV based off the skateboard platform? We’re not talking about building the Space Shuttle- and there’s plenty of access to competitors’ platforms to tear down, look at, and mimic. Doesn’t seem super complicated, does it simply boil down to the fact that the Big 3 simply have no appetite to carve off any resources to work on EV projects? I just don’t get it. EV’s seem so much more simple than the hundreds and thousands of extra parts that ICE platforms contain.

I think it is mostly they don’t see the need to spend $2B or so in order to develop an EV platform when they have profitable trucks. Remember, this might be influential board members that don’t want to invest, etc. To get them to change you have to make sure they see the writing on the wall that the company is in trouble. Policy from government could help effect change or a successful competitor.

They will leap into EVs, both cars and trucks, when they perceive (key word) that they have a choice of losing ICEV sales to either their own BEVs or the competition’s BEVs. This is why it is so critical that at least of the top-tier Legacies gets serious BEVs. It’s not that Honda will sell a million 240-mile Clarity EVs/year, but that they’ll steal sales from Toyota and push them to release a 200-mile Prius EV. The dominoes are set up; we just need someone to tip the first one over.

Multiple number of reasons. Existing companies that make profit have a strong sales and marketing group. Ask any salesperson, when is a good time to buy. Today, of course. “Today is always a good time to buy.” They want to sell what they have today, they don’t what to talk about things coming out in the future, because it would cause buyers to delay buying. That would lead to less profit. Less profit leads to poor quarterly reports, that lead to stock drops and possible dividend decreases. Realize that investors in major companies have a lot riding on dividends, considering most all retirement funds are invested into lots of dividend stock. So any product sold in volume must be sold at a profit. Unfortunately for GM, the Bolt is a vehicle class not popular in the US. The Kia Soul is the same size and sells about 100k per year, but it’s half the price of a Bolt. Both Bolt and Volt were not positioned well to succeed. So in their case it makes them hesitant. Starting with Cadillac is a better idea, but it took expensive mistakes to get there. Dealers have the same “today is a great time… Read more »

Thanks for the response. What it boils down to, I suppose, is the legacies simply wanna ignore where the puck’s going.

No. The established manufacturers want to make a profit. Once there’s potential there then the floodgates will open.

They won’t give a damn about what powers/drives their cars, as long as their cars sell well and they make money from them. Currently that profit making potential is difficult to come by for EV’s due to the battery cost.

I agree with this. I also think most companies have something in test and development that is secret, but due to costs it won’t be built just yet. VW is probably the most open about what they are doing, but they’ve had bad press for a while so they needed to say something.

More or less, however both GM and Ford laid off a bunch of people (starting with voluntary payouts) because that’s how they’re going to still have good numbers once the sales start to drop off as they transition over. So the reduction in people will result in lower payroll costs, which can be used to fund new development. If you cut $1+ billion from payroll you can put it into development and your out of pocket spend is the same amount of money for the year.

Even Tesla laid off about 7% to improve their numbers, because quarterly reports mean big ups or down in stock value. You look good in sales and profit, then the stock goes up, otherwise the other direction.

Amazon could be the sales model. Buy through Amazon.com. I am sure this is in no small part what Rivian wants from the deal. If anyone wants to sue Amazon for the direct sales model… they will either face Amazon’s incredible warchest or Amazon will simply acquire a dealer license and have at it. Amazon wants this because they can deliver their goods at lower costs using modified R1S’ or R1Ts.

Announced by “Rooters”? What the heck it’s Reuters … like Royters … Rooters is next to Hooters! Spit it out dude. Summary of this video … “I’ve got some reliable secrets” Credence “pretty true”. Rivian doesn’t need the Capital. Really? So much funding? Don’t need GM or Amazon … um GM is behind in electric cars? This dude is smoking a fat one. All things brain dead.

Yeah I was going to comment on that but then it would get 200 demerits. hehe. Can’t believe someone who has ever read a newspaper is clueless toward Reuters.

The earlier comments regarding Trump’s personality are so off-the-wall that those were equally clueless, as compared to people who really know him.

Well if he wants to know what people think: Besides inadvertently doing what was just said – I didn’t get any info out of it.

My biggest question is: “How Much?”.

Ford, GM and FCA have no worries if the Rivian costs $90,000. The VIA Viatrux was a bold idea and should have turned the pickup truck world on it’s ear. At fleet trial sales and a price of $88,000, there is no viable business plan. Is VIA even alive at this point? If so, they’re on life support.

While the top three pickup truck builders reap billions from ever-increasing pickup truck MSRPs, it’s the $35,000 – $45,000 arena that is their bread and butter. Tesla’s truck play scares me. Musk knows he cannot compete on price so he is scheming to invent a new genre of “super truck”, likely to cost the end customer VIA money+.

The $45,000, 350 mile affordable EV AWD pickup truck seems a pipedream at this point. $100,000 Rivians may just become the Land Rover of EVs, but that means Michigan’s ICEmakers’ profit centers are safe for the foreseeable future.

“hey alexa, will Amazon employees be forced to join the Union since we’re partnering with GM, whose largest shareholder is the UAW?”

Well they have made 2 (count ’em – two) vehicles, and do have $700 million from Amazon supposedly. Sounds better than Atlis. How many $millions were spent on Solyndra? With inflation, its about the same amount of Cash.

Pickups are 17% US market share with an average price of 50k, and are keeping the big three alive (more so because Germans don’t build full size trucks). That raw fact alone makes even Elon shutter because the Model 3 by metrics alone will not be that much a market presence even if they hit a 35k sticker price. Hence why Rivian is an EV in a league of its own. Rivian’s idea of building an EV for that market is it’s most novel jolt to the auto industry. This deal is interesting but kinda bizarre to me, because I truly believe GM is mostly clueless about cars, but knows EV’s are the future. I too believe in part what other people have said in the comments section, and agree that most major auto manufacturers battery technology and drivetrain platforms are so lacking, that GM sees this as an opportunity to buy a superior product and then slap a Silverado… or better yet “Electric Cadillac” on top of it and put it on GM lots. I truly believe GM thinks they can buy a Rivian platform, and put GM parts around it for a lower price, and bring a EV… Read more »

“I also think the money that Amazon would be giving Rivian would be an ample amount to establish Rivian proprietary destination charging stations (800 volt compatible) that also could serve as third-party charging stations for a price premium. ”

Not even just that. Amazon has an App on the majority of smartphones, so it makes it easy to pay for charging using their app. So in the long term future, Amazon convenience stores with chargers. So you can shop Amazon while waiting for the charge. They will sell food/drink, popular items, and have store pickup.

I’ve lurked in a couple of these comment sections on Rivian and it seems that people miss that Amazon and GM are buying a minority share in Rivian, they don’t get to tell them what to do or to buy the company. What they get is stock dividends and access to company records. If Rivian succeeds them GM will have an idea how likely they will encroach as GM moves up market. Lots of companies do this in companies they think will be disruptive. As many have mentioned, Daimler and Toyota did this with Tesla. Did Tesla get crippled by those investments? Why would it be different here?

The benefit to Rivian is access to Amazon’s knowledge on supply chain management and GM’s manufacturing experience. I’ve seen elsewhere that Rivian wants to reuse the closed plants and workers to build its EVs. GM has the added benefit of good PR for supporting Rivian’s efforts as they lay-off workers and close plants, should they ever do that. Wait, they just did. I don’t think it’s hard to see why GM is willing to put down a trivial amount of money and get bragging rights that they are helping the little guy.