While comparisons to Tesla are inevitable, electric car maker Rivian is finding its own way within the widening global transportation electrification market.
An American start-up, Rivian was founded in 2009 and has facilities in Canada and the U.K., along with several in the U.S. Its electric vehicles are at varying stages of development, and include a pickup truck and a sport utility vehicle (SUV) which have been over a decade in the making. They are expected to roll out this summer. Also amongst Rivian’s projects is a fleet of electric delivery trucks for Amazon, which are central to the ecommerce giant’s strategy to reduce emissions. It placed an order for 10,000, to be delivered late in 2022.
Rivian has a remarkable roster of investors, including Amazon, BlackRock, Fidelity, T. Rowe Price and Ford, with which it formed a partnership to produce an electric vehicle based on its technology. Rivian raised another $2.6 billion this month, and is now valued at $27 billion. There is certainly no lack financial support, but this does not diminish the difficulty of Rivian’s undertaking. “The process of creating something like this is anything but simple,” said founder and CEO RJ Scaringe. “It’s a complex orchestra, several thousand parts coming from several hundred suppliers.”
Like Tesla, Rivian is seizing upon the opportunity offered by the electrification of transportation, which most automotive executives see as the future. Looking at Tesla’s rise, it is plain to see why. Last year the top electric car company grew 500%. It is the most valuable car manufacturer in the world, despite its relatively low production volumes. But this is picking up. Tesla made 10 times more cars last year than the 50,000 it was making annually five years earlier. It sold more cars in 2019 than in the two previous years combined. The automotive industry at large is following its lead, with GM, Ford, Volkswagen and others investing billions to develop electric vehicles.
Neither Tesla’s dazzling success nor Rivian’s well-funded promise poses a true competitive threat to the other, as the two companies are fundamentally different. First, Tesla has been built on sporty sedans. This type of vehicle enjoys less popularity in the U.S. than trucks and SUVs, but Tesla plans to make an electric pickup this year. Rivian focuses entirely on “adventure vehicles” – all-electric trucks and SUVs which can be taken off road. “There’s a perception that this is winner take all, and that’s just wrong,” Scaringe said. “Consumers need to have different brands, different flavors. Our success is not at all mutually exclusive to others’ success.”
Tesla and Rivian also take different approaches to growth. The former has always fast-tracked growth, sometimes setting overly aggressive targets, while Rivian moves along at a slow and steady pace. Rivian also differs from other automotive start-ups, in that it has no intention of going public by merging with a shell company. “We want to launch, demonstrate our capability and let our performance speak for itself before we can look into being public,” Scaringe said.
These differences could be attributed to Tesla and Rivian having very different types of CEOs. Elon Musk is brash and disruptive. The more mild-mannered Scaringe is a “bookish engineer” with a Ph.D. from the Massachusetts Institute of Technology, according to the New York Times. Analyst Michael Ramsey of Gartner is watching to see if Rivian will avoid Tesla’s past mistakes. “Is Rivian going to be a giant future competitor to Ford and GM? I don’t know,” he said. “But they have all these mega-investments. They have a strategic partner in Ford. They have contracts with Amazon. Of all the EV start-ups, they seem to have the best chance of making it.”
