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Electric-Truck Maker Gets Fresh Funds -- WSJ

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09/11/2019 | 02:48am EDT

Electronic-vehicle startup Rivian gets $350 million as it readies first pickup

By Mike Colias 

Rivian Automotive, an electric pickup-truck startup backed by automotive and technology giants including Amazon.com Inc., has landed $350 million from privately held Cox Enterprises as it prepares to launch its first vehicle next year.

Cox and Rivian will look to partner in areas such as vehicle maintenance and digital sales, Rivian Chief Executive RJ Scaringe said in an interview. Atlanta-based Cox operates its namesake cable company as well as dozens of auto-related businesses, including consumer website Kelley Blue Book and car-auction company Manheim Group.

Cox's investment brings Rivian's valuation to about $3.5 billion, a person familiar with the matter said. The companies declined to comment.

Founded a decade ago, the suburban Detroit-based startup has drawn attention in automotive circles since late 2018 after revealing a futuristic-looking electric pickup truck and a boxy electric sport-utility vehicle. The vehicles are expected to go on sale in the U.S. by the end of 2020, each priced around $70,000 before electric-vehicle tax credits.

The latest financing adds to the more than $1 billion Rivian has already raised from investors this year. Ford Motor Co. in April invested $500 million in Rivian and said it would co-develop an electric vehicle using the startup's technology. That deal came after discussions between General Motors Co. and Rivian unraveled, people familiar with the matter have said.

Earlier this year, Amazon led a $700 million financing round in Rivian. Amazon has a prototype delivery vehicle slated to use Rivian's electric system, people familiar with the project said. The companies declined to comment.

Traditional auto companies are pouring investment into battery-powered vehicles, prompted in part by tightening tailpipe emissions regulations in China, Europe and elsewhere. Auto makers globally have committed more than $200 billion to develop hundreds of electric models in coming years, consulting firm AlixPartners estimates.

The shift has spawned dozens of electric-vehicle startups, many patterned after Tesla Inc.'s success with pricey electric sports cars. But relatively few startups have taken aim at electric pickup trucks and large SUVs, heavier vehicles that will require larger batteries. Detroit's auto makers generate the bulk of their profits from big pickup trucks and SUVs.

Rivian's trucks use a so-called skateboard layout, with a large battery under the floor and electric motors powering each wheel, enabling the vehicle to travel around 400 miles per charge. The "lifestyle" vehicles are aimed at outdoors-minded buyers and will have off-road capability lacking in today's electric vehicles, Mr. Scaringe said.

"We have to reset expectations" of what electric vehicles are capable of, he said.

The company plans to assemble its trucks at a former Mitsubishi Motors Corp. plant in Normal, Ill., which it bought for about $16 million in 2017.

Rivian will have competition. Tesla has said it also will target the lucrative market for big American pickup trucks. In a tweet Saturday, Tesla Chief Executive Elon Musk said the company likely will unveil an electric pickup truck in November.

Ford is developing a battery-powered version of its top-selling F-150 pickup truck separate from its project with Rivian. GM also has said it has an electric pickup truck in the works.

Mr. Scaringe said Rivian plans to sell its trucks directly to consumers, without a network of dealerships. It may lean on Cox or others for expertise in areas like vehicle maintenance and logistics, he said.

Cox's Manheim division operates a large auction network where dealers buy and sell used cars. Working with an upstart like Rivian will give the company a better view into future automotive trends, said Sandy Schwartz, president of Cox Automotive.

"We provide services from the time [cars] come off the assembly line to the time they go to the junkyard," Mr. Schwartz said in an interview. "We need to understand what that's going to look like five, 10, 15 years from now."

Write to Mike Colias at Mike.Colias@wsj.com

Corrections & Amplifications Ford has said it will develop an electric vehicle with Rivian. An earlier version of this story said the companies are working on an electric pickup truck. (Sept. 10, 2019)

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM -0.23% 1839.34 Delayed Quote.22.74%
FORD MOTOR COMPANY 0.43% 9.45 Delayed Quote.23.53%
GENERAL MOTORS COMPANY -0.54% 38.86 Delayed Quote.16.17%
MITSUBISHI CORP 0.37% 2811 End-of-day quote.-5.16%
MITSUBISHI MOTORS CORPORATION 0.60% 500 End-of-day quote.-12.59%
NISSAN MOTOR CO LTD 0.34% 713.5 End-of-day quote.-16.66%
TESLA INC. -0.27% 245.2 Delayed Quote.-26.32%
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