Rivian Raises $2.5 Billion As Investors Chase Electric Car Buzz

By Ben Foldy 

Rivian Automotive LLC, an electric pickup-truck startup backed in part by Ford Motor Co. and Amazon.com Inc., said Friday it had secured another $2.5 billion in funding from private investors, providing it with extra cash to help navigate growing economic uncertainty and release new vehicles next year.

Asset-management firm T. Rowe Price Group, Inc. led the investment round, which in addition to raising more money from existing investors also attracted new backers, including the Soros Fund Management LLC and Fidelity Investments, Rivian said Friday in a press release.

Amazon and BlackRock Inc. also added to their earlier investments, the company said.

The new funding round illustrates that the auto industry's push to electric vehicles is still generating interest from investors, even as the economic fallout of the Covid-19 pandemic has dented buyer demand for vehicles and forced many auto makers to draw down on their credit lines to shore up cash.

Rivian plans to launch three new models in 2021, including commercial delivery vans for Amazon's fleet and a fully-electric pickup.

"Our teams are working hard to ensure our vehicles, supply chain and production systems are ready for a robust production ramp up," founder and Chief Executive R.J. Scaringe said in a statement.

Rivian, founded more than a decade ago in suburban Detroit, has captured the interest of both auto and tech executives in recent years with its plans for the pickup and SUV market, squarely taking aim at Detroit's dominance in two highly-profitable categories.

The company's first two models, the R1T electric pickup and R1S SUV, were expected later this year but have been delayed due to pandemic-related supply-chain disruptions. The vehicles are now expected to go on sale early next year, each priced around $70,000 before electric-vehicle tax credits.

Rivian has targeted outdoor enthusiasts in its marketing, depicting the company's futuristic vehicles against rugged landscapes rather than urban backdrops. The company plans to sell directly to consumers instead of relying on the traditional dealership model.

Investment in electric-car technology remains strong, as both startups and traditional auto makers vie to become the next Tesla Inc. Tesla's share price has increased nearly 25% in just over a week, and the company's valuation at over $250 billion roughly equals that of Ford, Toyota Motor Corp., General Motors Co. and Fiat Chrysler Automobiles NV combined.

Auto companies have been eager to combine the investor exuberance for electric cars with the profit potential of popular large SUVs and pickup trucks, and are investing billions into what's still a novel technology for many buyers.

While its closest competitors have benefited from enthusiasm in the public markets around electric vehicles, Rivian has drawn most of its investment through private financing.

Today's raise adds to the more than $2.8 billion it raised last year from investors including Ford and cable-conglomerate Cox Enterprises Inc., which also has dozens of auto-related businesses.

In 2017, Rivian acquired a former Mitsubishi plant in Normal, Ill., to build its vehicles.

Last year, Rivian moved into the commercial-delivery market, where the limited range of electric vehicles and slower refueling times are less of a concern for buyers. The company has a deal with Amazon to design and provide 100,000 electric delivery vans in the next decade as part of the e-retail behemoth's plans to eliminate its carbon footprint before 2040.

Write to Ben Foldy at [e-mail]

(END) Dow Jones Newswires

July 10, 2020 10:48 ET (14:48 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.