Will Rivian raise $ 2.8 billion a year to be the next Tesla?

$ 1.3 billion-On Christmas Eve 2019, Rivian received a Christmas gift from investment agency T. Rowe Price. This is already the fourth financing in a year. This is enough to make other auto companies and even early Tesla envious.

Many people are unfamiliar with the Rivian brand, but in the United States, it is the most popular "fried fried chicken". The company, whose product has not yet appeared, has a valuation of more than $ 7 billion.

As a "new force" in the American car industry, Rivian was founded in 2009 and has not yet produced a car. The target markets are electric pickups and SUVs. 2019 is an extremely happy year for Rivian. The total amount of the four financings reached 2.8 billion U.S. dollars (about 20 billion yuan). The list of investors includes a number of giants: Amazon, Ford Motor Co., and auto service giant Cox, which blessed Rivian. Amazon's $ 700 million investment in it has even become the biggest bet it has made in the car industry that is being transformed.

This "low-key" electric car startup that has been around for 10 years has been dazzling for a while.

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After Rivian became a black horse and jumped into people's sight, its founder RJ. Scaringe also stepped into the spotlight.

It is said that Scaringer loved only two things in his life: nature and cars.

As a child, Scarlinger was either helping out in a neighbor's garage or rowing a boat on the Indian River at his doorstep. Starting in high school, he got the idea to start his own car brand.

In 2009, Scarringer received a PhD in mechanical engineering from MIT's famous Sloan Cycling Laboratory. It was also that year that he founded a small car company, Mainstream, which was later renamed Rivian. The name is taken from the Indian River where he lived during his childhood.

Initially, Scaringer's company focused on building an efficient internal combustion engine, relying on start-up funds provided by family and friends, and the team to build a fuel-efficient sports car. In 2011, Scarlinger realized that “the things he likes are making the environment dirty”, he decided to turn the rudder and develop an electric car.

At that time, Tesla was also struggling in the development of electric vehicles, and most people still think that electric vehicles are big toys for rich people. They can't pull goods or off-road, and they need three days to charge.

Thanks to Scalinger's eloquence, Rivian has received support from Saudi car dealership network ALJ, Japan's Sumitomo Mitsui, Standard Chartered Bank and other institutions before the prototype of the product is available. In 2017, Rivian bought the Mitsubishi plant for upgrading and preparation for mass production. At the end of the year, Rivian's first prototype entered the test phase, and also obtained strategic investment from Japan's Sumitomo Corporation. At the 2018 Los Angeles Auto Show, Rivian officially released the pure electric pickup R1T and electric SUV R1S. According to the plan, Rivian will start selling the first electric pickup truck type R1T in the fall of 2020.

At the end of 2019, targeting the same market segment as Rivian, Tesla brought Cybertruck. One is Detroit Superman, and the other is Silicon Valley Iron Man. With short arms, who can win?

Selected "kids"

"Alexa, navigate home."

In the past few years, Amazon's Echo Bluetooth interactive smart speaker has almost become the most popular Christmas gift in Europe and the United States, and Alexa, the voice assistant who almost becomes a virtual member of the family, is now in the car.

On January 6, this year, at Las Vegas 2020CES (Consumer Electronics Show in North America), American electric car manufacturer Rivian announced that it will directly embed Amazon's voice assistant Alexa into its two upcoming models, the electric pickup truck. R1T and electric SUV R1S.

In the name of black technology, Rivian has become the darling of capital.

The reason why it can get 4 giant investment in one year is the most important support of Rivian's core technology-this is also the result of Scaringer's "hidden" decade. One of Rivian's strengths is a modular electric "skateboard" platform.

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Rivian Skateboarding Platform / Rivian Official

Scarlinger once said, "This platform will be the core of every Rivian product." Rivian hopes that in the future, whether it is the company's own electric car products, or products built for Amazon and Ford, it will be developed on this platform. .

According to the official website, the "skateboard" platform integrates the motor, intelligent battery management system, cooling system, suspension system, hydraulic control system, etc. into a complete module, which is located in the middle of the chassis. These components are lower than the height of the wheel, so The center of gravity of the vehicle is lowered. This can reduce the probability of rolling accidents during driving, which is especially important for pickup trucks, because pickup trucks need to deal with the challenges of bumpy mountain road conditions in off-road scenarios to driving safety.

What Ford sees is the "skateboard" platform. In addition to the huge investment, Ford also reached a cooperation agreement with Rivian, planning to develop next-generation electric vehicle products based on the "skateboard" platform, including the all-electric Lincoln SUV to be launched in 2022. Previously, Ford had announced that it would release 40 new energy vehicles by 2022, of which 16 were pure electric. In the case of difficult delivery of their own electric pickup, betting on Rivian is naturally a good choice.

Another eye-catching "black technology" is the tank steering of the electric pickup R1T. For Rivian, "the off-road handling of a vehicle is really important performance," said Richard Farquhar, vice president of Rivian. Behind the turning of the tank is the support of four motors from the skateboard platform. Each wheel is equipped with an independent torque control device, which helps to obtain the best off-road performance of the vehicle.

Moreover, Rivian's clear market positioning. American consumers have always loved pickup trucks. According to Automotive News data, 2.9 million pickup trucks were sold in the United States in 2018, accounting for 17% of the market. Of the 25 best-selling models in the United States in 2018, five were pickups. In addition, pickups rank among the top three new car sales in North America.

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"It's very smart to target the US market with high-end pickups and SUVs. This is a model Americans want to buy, not a compact or mid-size sedan," said Sam Abuelsamid, chief automotive analyst at Navigant Research. Car profit margins are also higher, especially for luxury models.

When the global automotive industry is transitioning to electrification, Rivian's appearance will become the first player in the pickup industry to transform. In addition to seizing market opportunities, it also coincides with Amazon's needs.

As the world's largest e-commerce platform, Amazon shipped nearly 3.5 billion parcels in 2019 and delivered more than 800 million miles safely. Such a huge logistics network, switching to electric pickup trucks, the savings in transportation fuel costs after changing from oil to electricity will be considerable. Therefore, Rivian can get a large order of 100,000 from Amazon, it seems logical.

Detroit Superman vs Silicon Valley Iron Man

"Someone is young" is a phrase that best describes Rivian and Tesla. Tesla, the new car-making force that was born at that time, now welcomes younger rivals.

The American business magazine Forbes once compared the founders of the two companies. "If Musk is 'Iron Man', then Scaringer is more like 'Superman'."

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Superman and Iron Man are in two parallel worlds, DC and Marvel, and will never intersect. But in reality Rivian and Tesla, the fight is inevitable.

Since Tesla launched Cybertruck at the end of 2019, the battle between the two companies in the market segment has officially started.

Compared with Tesla, Rivian is "stable" and completely unlike a new car building force. Tesla prefers Internet talent, and Rivian has hired industry veterans who have worked for automakers such as Ford, Jeep, GM, Lotus, and even McLaren for many years.

In addition, Rivian did not choose to rent an office in Silicon Valley like Tesla, but set up the company in a small town near Detroit. The purpose is self-evident, in order to be closer to the supplier, and to be a step closer to becoming a real car company.

Rivian's engineers also continued a cautious style. By working with major global suppliers, if Rivian buys rod ends, ball joints, fasteners, window regulators and other components, systems and technologies that have been tested extremes from the industry's top suppliers, then as long as it Working properly and running well, Rivian doesn't need to spend any effort on this.

For Tesla, Rivian has some competitive disadvantages.

Tesla was established in 2003, and the first Roadster was officially delivered in 2008. The Rivian, which was born in 2009, will only begin delivering the first model in its 11th year of establishment. In other words, Tesla's hundreds of thousands of electric vehicles have already been on the roads around the world when Rivian has not yet delivered.

There are three versions of the Rivian R1T, with a range of 370 km, 482 km, and 643 km, respectively; Cybertuck also has three versions with a range of 402 km, 483 km, and 805 km. Judging from the pricing of the two, Rivian R1T starts at $ 69,000, and Cybertruck starts at $ 39,900, up to $ 69,900. In other words, for the same price, you can buy the low-profile R1T and the highest configuration of Cybertruck. Cost-effectiveness, Rivian has no advantage.

Not to mention that Tesla's current market is not limited to the United States, but is aimed overseas. China has also given it a green light for Musk to say "thank the Chinese government". This is why Musk was able to dance in a distant Chinese factory while his opponent Rivian received such a Christmas gift.

Rivian's opportunity

Rivian still needs some time to shake Tesla's solid market. But Rivian is not without the opportunity to catch up.

First, Rivian has seized the lead in the electric pickup market. When Tesla launched the electric pickup truck Cyberbert at the end of last year, Rivian launched the electric pickup truck R1T at the Los Angeles Auto Show as early as the end of 2018.

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Rivian R1T / Rivian Official

Rivian R1T will be delivered in the second half of 2020, while Tesla's Cyberbertuck will be delivered by the end of 2021. This means that Rivian will have a market window of one year. In this year, Rivian will have no competitors. This year is crucial if Rivian wants to gain a foothold in the market.

China's pickup market is quietly awakening. From January 1, 2018, the state cancelled the inkjet and reflective strips of pickup trucks. From January 1, 2019, the Ministry of Transport canceled ordinary freight vehicles below 4.5 tons and cancelled the operation license and driver's qualification certificate. In the same month, the ten national ministries and commissions jointly issued the "Implementation Plan for Further Optimizing Supply, Promoting Steady Growth of Consumption, and Promoting the Formation of a Strong Domestic Market", which proposed "steadily advancing the relaxation of pickup truck restrictions into the city".

Thanks to the easing of policies, in 2019, where the auto market has fallen sharply, the pickup market has remained strong, and sales have remained basically the same as last year. As the scope of pickup lifting is gradually relaxed, Rivian also has countless imagination in the Chinese market in the future.

Second, Rivian will also lean on Amazon and Ford. One is the most profitable e-commerce company in the world, and the other is the seventh largest car company in the world.

Amazon especially appreciates Rivian. In addition to the huge investment, it has also placed orders for 100,000 vehicles, up to 4 billion US dollars. What does 100,000 mean? Tesla only achieved annual sales of over 100,000 for the first time in 2017, and it has been 3 years since the delivery of the first Model S. Based on the current production capacity of the Rivian plant at 2 to 25,000 vehicles per year, this huge order is enough to support its development for several years.

As Ford in the US pickup market, Ford naturally cannot afford to lose the opportunity to snatch electric pickups. However, his own electric pickup was difficult to deliver, so he could only bet on Rivian. At Tesla's launch event at Cybertruck, Tugla ’s tug-of-war against the Ford's star pickup F-150 was even more fueling, betting Rivian became more determined. Ford, as a traditional car company, has accumulated in the supply chain, manufacturing and sales network, which will also help Rivian.

In addition, Rivian is not limited to its own production. Compared to the "Apple" status of Tesla's auto industry, Rivian seems to be more willing to become "Microsoft", the two take a completely different line.

Rivian's core technology skateboarding platform is very flexible and can be used in different configurations to meet multiple purposes, thereby helping traditional car manufacturers reduce the difficulty of developing electric products. If the cooperation with Ford is successful, it will undoubtedly bring a strong endorsement to this platform. Once this "big bet" is successful, Rivian will be far more valuable than a company focused on producing its own electric products.

Based on the above, Rivian is considered to be "Tesla's nightmare". The player who can challenge Tesla to dominate the world has finally arrived. Scarlinger has said that he is not a follower of Musk, "if you copy the same development path as Tesla, it will become meaningless."

Rivian doesn't want to be another Tesla, nor will it be another Tesla. It is taking a completely different business route from Tesla. However, its arrival still has the opportunity to affect the overall pattern of the electric vehicle industry, which seems to coincide with the role of Tesla.

references:

1. Chuck Tannert, [2019], Meet RJ Scaringe, Founder Of Rivian Automotive—And Tesla's Worst Nightmare.

2. Rivian, https://rivian.com/about/

3. Yan Fei, [2019], "I, financing 20 billion this year, challenge Tesla"

4. Ben Klayman, [2019], What Tesla did for luxury cars, Rivian wants to do for pickups.

5. Christian Ruoff, [2019], Q & A with Rivian's VP of Propulsion (Full Interview).