Electric Truck Maker Rivian Secures $2.5B In New Financing

• Electric truck and SUV maker Rivian has secured $2.5 billion in new financing

• Analysts: "The days of Tesla's virtually unchallenged dominance may be numbered."

• Amazon has ordered 100,000 Rivian electric delivery vans

Rivian has secured $2.5 billion in new financing, the electric truck maker announced on Friday, July 10.

T. Rowe Price Group, Inc. TROW, a previous investor, led the investment round, with participation from the Soros Fund Management LLC, Coatue, Fidelity Management and Research Company, and Baron Capital Group. Existing shareholders Amazon.com, Inc. AMZN and BlackRock, Inc. BLK also participated.

Rivian is the less-sexy-but-getting-sexier member of an electric vehicle company triumvirate that includes Nikola Corporation NKLA whose shares surged during its IPO last month, and Tesla, Inc. TSLA recently ranked as the world's most valuable transportation company.

Muscling its way up the ranking, Rivian has been on a tear since last fall, when Amazon AMZN, ordered 100,000 electric delivery vans from the Michigan-based startup.

Prior to that date Rivian had positioned itself as an adventure vehicle maker, focused on an electric pickup truck, the Rivian R1T, and an electric SUV, the Rivian R1S.

In total, Rivian completed four funding rounds in 2019, including a $1.3 billion investment led by funds and accounts advised by T. Rowe Price Associates.

Despite production delays tied to the coronavirus pandemic, the consumer vehicles are expected to launch early next year. Around 10,000 of the Amazon delivery vans will join the e-giant's fleet by 2022. 

Race to get electric truck, SUV to market

Rivian plans to produce the vans and pickup trucks at a former Mitsubishi Motors plant in Normal, Illinois, that it acquired in 2017.  The factory gives Rivian another edge over its competitors aiming to bring electric trucks and SUVs to market. Tesla, for one, is still searching for a manufacturing facility for its Cybertruck.

"The days of Tesla's virtually unchallenged dominance may be numbered," Morgan Stanley analysts said in a research note posted today. Rivian has now raised approximately $6 billion of equity capital, compared to Tesla's total equity raises of approximately $8 billion, a figure based on Morgan Stanley MS calculations, analysts wrote.

Broadly speaking, Rivian's cash infusion reinforces the gold rush trend toward vehicle electrification, Asad Hussain, a Pitchbook analyst, said in an emailed statement.

"Assuaging fears that COVID-19 could delay investments in electric vehicle technology, investment into electric vehicle technology remains strong," he said.

"Mirroring the significant rise in the share prices of electric vehicle companies such as Tesla and Nikola," startups such as Rivian and QuantumScape continue to raise outsized financing rounds, according to Hussain.

In the first half of 2020, $968 million in venture capital was invested into electric vehicle startups, according to Pitchbook.

Related stories:

Amazon announces purchase of 100,000 EV delivery vehicles from Rivian — the largest order ever

Rivian closes $1.3B funding round

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Photo credit: Amazon