The online retail giant is leading a $700 million investment in Rivian, a Michigan company that is developing a battery-powered pickup truck and an electric sport utility vehicle.

Share story

A potential rival to Tesla in electric cars just got a big boost from Amazon.

The online retail giant is leading a $700 million investment in Rivian, a Michigan company that is developing a battery-powered pickup truck and an electric sport utility vehicle.

Rivian announced the new round of investment on Friday, offering few details but saying it would remain independent.

Founded in 2009 by an MIT-trained engineer, R.J. Scaringe, Rivian previously raised about $500 million from Sumitomo, a Japanese conglomerate known for its tire division, and Abdul Latif Jameel, a Saudi industrial group. Those earlier investors also took part in the new investment round, though the companies did not provide details about how much money they put in.

“We’re inspired by Rivian’s vision for the future of electric transportation,” Jeff Wilke, Amazon’s chief executive for worldwide consumer, said in a statement. “R.J. has built an impressive organization, with a product portfolio and technology to match. We’re thrilled to invest in such an innovative company.”

The deal is the latest example of how the auto industry is being reshaped by new technologies and nimble companies that have raced ahead of many traditional carmakers. While General Motors, Ford Motor and others are scrambling to introduce new electric vehicles, Tesla has become by far the leading seller of electric cars in the United States. Waymo, a division of Google’s parent company, Alphabet, is considered by some analysts to be the leading developer of autonomous vehicles.

Rivian first showed its truck and SUV at the Los Angeles Auto Show in November. The key feature of each is a chassis that is shaped like a skateboard and includes all the components that propel the vehicles — a large battery pack, axles, suspension, cooling system and four electric motors. The company claims its pickup, the R1T, and its SUV, the R1S, will be able to go up to 400 miles on a full charge.

Both are expected to sell for $68,000 or more. In Los Angeles, Scaringe described them as upscale vehicles that can be used for off-road adventures. They are intended to compete for motorists who buy pricey Land Rovers and Porsche SUVs.

“This is a vehicle you can use,” Scaringe said. “You can get it dirty, but it’s still a very thoughtful, intelligent design.”

Both vehicles may end up competing directly with Tesla models. Tesla already offers an SUV, the Model X, and is working on a pickup truck and a smaller SUV. Rivian has said it aims to sell about 20,000 vehicles in 2021 and double that in 2022. Last year, Tesla sold about 245,000 cars.

Analysts said Rivian’s success was by no means assured.

“They still face all the hurdles,” said Karl Brauer, executive publisher at Cox Automotive. “They have to produce the vehicles. They have to deliver the vehicles. Tesla has been around longer, but it’s still struggling to set up a dealer network and is struggling with high-volume production.”

Rivian has kept a low profile, especially compared with Tesla and its chief executive, Elon Musk. Until recently, to keep its operations secret, Rivian did not display its name on its buildings. While Scaringe has a Twitter account, he has posted only 87 tweets — a small fraction of Musk’s nearly 7,000.

R.J. Scaringe, Chief Executive Officer of Rivian poses for a photo in Plymouth, Mich. The company is another in a growing line of startups and established automakers looking to break into the fully electric vehicle market. (AP Photo/Paul Sancya, 2018)
R.J. Scaringe, Chief Executive Officer of Rivian poses for a photo in Plymouth, Mich. The company is another in a growing line of startups and established automakers looking to break into the fully electric vehicle market. (AP Photo/Paul Sancya, 2018)

And while Tesla and Musk regularly make headlines, relatively little is known about Scaringe, who is 36. He grew up near Melbourne, Florida; studied at Rensselaer Polytechnic Institute; and earned a doctorate in mechanical engineering at the Massachusetts Institute of Technology.

He then created a company, Mainstream Motors, in Florida, intending to produce an affordable sports car that could go 60 miles on a gallon of gas. In 2011, the company was renamed Rivian, and its focus shifted to electric vehicles.

Rivian employs 600 people, with its main office in Plymouth, Michigan, about 30 miles west of Detroit. In 2016, it bought a mothballed auto plant in Normal, Illinois, previously owned by Mitsubishi Motors.

Chris Koos, the mayor of Normal, where Rivian plans to produce its vehicles, described Scaringe as a “broad thinker” who seems immersed in operational details.

“When you ask him a technical question, you can expect about a 10-minute answer,” Koos said.