Rivian: Top EV Startups to Look Out For in 2021 — Prime Chale

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Prime Chale

8 min readJan 20, 2021

This article is part of our ongoing series about top EV startups. Click here to access a list of our top picks.

Rivian has been in the spotlight ever since the announcement of its R1T pickup truck and R1S SUV. The Michigan, US-based automotive company founded in 2009 by CEO Robert “RJ” Scaringe manufactures electric cars only. With $8 billion raised to manufacture EVs, working models of its vehicles, plans to ship out its EVs starting June 2021, and a hefty contract from Amazon to build its electric vans, Rivian has earned its stripes and is leading the rest of EV startups in the US.

In this piece, a part of our ongoing series about top EV startups, we examine Rivian’s prospects amidst the increasingly competitive and crowded world of electric vehicles. While market conditions will soon determine which EV startup stays and which own winds up, we believe Rivian will have a foothold, barring unforeseeable circumstances.

Our Metrics

2020 was called the year of Electric Vehicles, but 2021 is truly the beginning of the decade of the EV. New and established carmakers are rolling different models of EVs, and the news is awash of EV startups going public or raising funds.

This, however, raises a problem — there really are too many EV makers, and this makes it hard to sift the ones with prospects from the rest of the crowd. The low entry barrier to EV is proliferating a generation of tesla wannabes, many of whom will not be profitable, or even manage to make their concept car.

So you may make better use of your time, we trawled through over 100 EV makers to present to you EV startups worth their salt. We based on picks on

Business model / unique offering,
Valuation and funding secured,
Completion of EV models, and number of sales/preorders
Technology partners,
How well their EV will perform in their market section, and
Expansion plan.

Rivian

Business Model / Unique Offering

Rivian’s business model is based on offering an ecosystem of electric autonomous vehicles and related products. The company also plans to foray into the ride-sharing and driverless market. Currently, the manufacturer has a pickup truck as well as an SUV model. The truck is likely to be the first EV truck in the market, while the SUV aims to compete with Tesla Model X.

Another of Rivian’s offerings is selling its electric Rivian Skateboard (car platform/chassis) for other manufacturers’ use. The platform business is currently heating up, as different carmakers hope to provide off-the-shelf powertrain and drivetrain components to manufacturers. Initially, Rivian had an agreement with Ford to provide skateboards for the Lincoln brand. However, this agreement has broken down, possibly due to the COVID-19 pandemic. However, Rivian is building out 100,000 vans for Amazon based on its platform.

Rivian’s path to its business model has not been a smooth one. The company initially planned to create a fuel-efficient vehicle, before pivoting to EV in 2011. Since then, the carmaker maintained silence till it announced its offering circa 2017. Since then, it has drummed up massive support.

Valuation / Funding

Rivian is a private, but well-funded car maker. So far, the company has raised $8 billion in funding. Currently, Rivian is valued at $27.6 billion, following the finalization of its latest $2.65 billion funding round. The carmaker is backed by Amazon, Ford, T. Rowe Price Group Inc., BlackRock Inc., Soros Fund Management, Coatue, Fidelity Investments, Cox Automotive, Abdul Latif Jameel, and Baron Capital Group.

As stated earlier, Rivian is not a listed company, and its stocks are not traded. The shareholders are made up of the founders, large corporations, and employees. Rivian has stated no plan for an IPO, choosing to focus on the production of its models and Amazon delivery vans this year. There is also no urgent need for an IPO as private funding covers its operations so far, with easy access to more if needed. Therefore, an IPO probably won’t be on the menu till its EVs are on sale. Eventually, an IPO will have to happen as early investors seek to liquidate while the EV stock boom is still on. It is just a question of whether going public will be through the traditional IPO, direct listing, or SPAC.

EV Models — Completion, Sales & Pre-Orders

Rivian has three EV Models — the R1T pickup truck and the R1S SUV for the general public, as well as delivery vans for Amazon.

The R1T, an all-electric pickup truck will be the first on the market. The truck will launch in three editions: launch, adventure and explore editions; all promising between 250–400 miles of range. Sales of the launch edition will begin in June 2021, while the other editions will begin in Jan 2022. Rivian claims to have sold out reservations on its launch edition, even though it declined to state the number. Launch edition will start at $75,000 and Rivian will follow a direct to customer model, following Tesla’s steps. Rivian also plans to build out its infrastructure and service centers.

The R1S SUV is also an all-electric vehicle, with emphasis on long range, modern luxurious cabin, driver assistance technology (Driver +), and more. It will go on sale after the R1T, with which it shares many similarities as they are based on the same platform. The UV will launch in 105.0-kWh, 135.0-kWh, and 180.0-kWh, with a range of 200m- 400 miles.

Concerning production, Rivian has development centers in Plymouth, Michigan; Southern California (Irvine, Carson & LA); Silicon Valley (San Jose and Palo Alto); Vancouver, British Columbia; and Surrey, England. Its primary manufacturing facility is located in Normal, Illinois.

Technology Partners

Most of Rivian’s technology is proprietary, or as proprietary as a car can get. According to CB Insights, Rivian has 83 patents, while a search for “assignee: Rivian” on patents.google.com has about 208 hits.

The company seeks to follow Tesla’s model in building out its technology and charging infrastructure codenamed the Rivian Adventure Network. However, Rivians EV will charge on the Combined Charging System (CCS), enabling charging on third-party charging networks.

Market Sector Prospect

Analysts generally agree that Rivian has a solid prospect if it continues. The company plans to sell SUVs and Pickups, both viable consumer markets with long-term growth prospects. Rivian’s pickup is mostly marketed to the off-road/adventure community, with plans to build a two-tiered charging network at highways and off-road destinations. Also, as the first pickup truck to enter the market, Rivian is expected to maintain a dominant market share in the US, and hold its own against upcoming contenders like Tesla and Ford in a soon-to-be crowded market. However, sales of R1T in Europe and China are unlikely to be stellar given the low demand in these markets.

Rivian’s R1S will also face stiff challenges in the SUV market, competing with the likes of Model X and Audi E-Tron. However, the SUV should do reasonably well in North America and Europe. Gaining a dominant share in China will be a tall order because of the intense competition in the market, but it should sell a significant amount.

Rivian also planned to sell its skateboard to other EV makers, with Ford planning to make use of it before the agreement fell through. However, with most startups planning mostly creating their platform technology, and hoping to sell it, there is not much hope of this being a major money-making part of Rivian’s business. Only traditional makers tend to purchase platforms, and most can easily develop one themself, or in conjunction with other traditional carmakers. Most EV startups will not purchase off-the-shelf platforms as they must first prove themselves capable by debuting with proprietary technology/unique offering. However, Rivian has the advantage of having the skateboard with the largest battery capacity (180 Kwh) on the market which is an important consideration should any OEM intend to purchase a platform.

Furthermore, Rivian’s plan to offer B2B electric vehicle solutions is another long-term growth market. Rivian will deliver 100,000 vans to Amazon as part of the latter’s Climate Pledge. As businesses seek to electrify their fleet, Rivian’s skateboard technology and willingness to customize for large buyers position it for growth.

The support of Amazon, Ford, Cox, and many more also suggest the automaker and its model is viable, and they all want access to its technology. Furthermore, Rivian also has some ambitious plans on its drawing table, including rally cars and electric jet skis. Finally, Research and Market estimate that Rivian will “Reach 50,000 Units in annual sales by 2025 by manufacturing adventure EVs and licensing its platform technology.”

Expansion Plans

Rivian has begun pilot production in its Normal factory. The company will begin sales in the US this year, and expand to Europe and China in 2022, with models smaller than the R1T and the R1S. According to Scaringe, “what will really drive volume in those markets is the follow-on products that are smaller and tailored for overseas customers.”

The smaller models Rivian plans to sell in Europe and China will be based on the Rivian skateboard, and also share key components with the R1S and the R1T, and will “ fit some of those other markets really well, in particular China.” Scaringe also added that “to really scale in those markets as we bring on follow-on products, having a production footprint outside the U.S. is going to be important … that’s a ways off … we wouldn’t be serious about building a car company if we weren’t thinking about China and Europe as important markets long term.”

Final Thoughts on Rivian

While Rivian has received warm receptions since the introduction of its EVs in 2018, mostly to popular acclaim, it remains to be seen how well the production vehicles will perform. However, if reviews coming through are anything to go by, they’ll be great. Till then, we’ll keep our fingers crossed.

Secondly, another concern of ours is the high cost of Rivian vehicles. Both vehicles retail at $65,000 and above, putting it above the reach of average buyers in the U.S., a segment Tesla appeals to with its $25,000 car. Except Rivian sells cheaper vehicles, whether it can keep up in the competitive market is up in the air. Furthermore, even though Rivian plans to expand to Europe and China, European traditional automakers have already upped their game. Except Rivian competes on price or brings in radically new technology (which will be copied soon), it’ll find competition exceptionally stiff as Tesla is currently finding it.

However, competition in Europe probably won’t be as stiff as in China, the current EV capital of the world. Chinese manufacturers are notorious for undercutting prices and its automakers are no exception. The huge number of EV startups, their fast-to-market approach, and notorious ‘996’ culture makes selling an EV a cutthroat market. Currently, China has the cheapest Ev, the Wuling Hong Guang Mini Ev at $4,000. There are also many sub $10,000 EVs in the work. Rivian, therefore, has its work cut out in the market.

Another concern of some analysts and even Rivian enthusiasts is the belief that Rivian backers like Amazon, Ford, and Cox are not in for long-term investment, but for their immediate needs. However, this concern becomes a non-issue as no company can survive on crutches forever. How Rivian performs when early investors liquidate their assets will set it apart from the pack.

Finally, regardless of these concerns, Rivian undoubtedly has great prospects, especially with its approach to adventurous buyers. Its Rivian Adventure Network might just be the game-changer it needs. However, it will be interesting to see how Rivian handles competition from Tesla and other traditional automakers. Also, once reservation holders take delivery of their pickup in June, their opinion on forums will make or mar the automaker.

Originally published at https://primechale.com on January 20, 2021.