Ford invested $500M into an electric vehicle startup. Here's how Rivian is doing exactly what Tesla isn't.
- Rivian is an up-and-coming startup company building high-performance electric adventure vehicles.
- So far, the company has received major investments from Ford and Amazon totaling over $1 billion.
- The company has progressed by making business decisions no other EV startup is making.
- Visit Business Insider's homepage for more stories.
Following is a transcript of the video.
Narrator: With Tesla's stronghold on the electric-car market and multiple legacy automakers already taking a crack at the segment, it's hard for small companies to make much noise. However, one particular American start-up seems to be on its way to becoming a household name when it comes to electric vehicles. Rivian is an electrical-vehicle start-up that was founded in 2009 and plans to start producing its two vehicles, the R1S SUV and R1T pickup truck, in 2020. Rivian was recently thrust into the global spotlight when Ford invested $500 million into the company. The unexpected partnership happened only shortly after Amazon made its own investment of $700 million. So what is it about Rivian that has major investors dying to get a piece and publications likes Forbes calling them Tesla's worst nightmare?
Matthew DeBord: I knew very little about Rivian prior to Rivian's CEO, this guy named R.J. Scaringe, coming to visit us here at Business Insider. You know, what they came in to talk to us about was how they were pivoting from building an electric vehicle of some sort to focusing on electric vehicles for the high-performance, outdoor, off-road, adventure market.Narrator: So what made Rivian choose to place its entire focus on such a niche market? To learn more, we caught up with the company's body engineer, Brian Gase, at Overland Expo, a biyearly event that showcases popular adventure vehicles.
Brian Gase: I think the answer, part of it is obvious on the surface. You know, it's a white space. There's nothing out there. We're here at Overland, and we're the first electric vehicle ever to be here. We're the first electric adventure vehicle in existence. And I think when you look at some of those things, it's a really exciting place for us, but the reality is, it's core to our DNA. It's core to who we are.
Matthew: So what Tesla did when they hit the scene with the original Roadster, which was a high-performance sports car, that's been done. And the market now, you know, the vehicle market, broadly wants SUVs and pickup trucks. So what Rivian's done that's fairly genius here is they've said, "Our angle is gonna be that we're gonna sell a pickup and an SUV that have great off-road performance, high-performance generally." They're still gonna have the versatility of a pickup, and still gonna have the versatility of an SUV, and they're probably gonna be able to charge a lot of money for it.
Brian: So they're very similar in performance. Spec-wise, we've got air suspension. We've got up to 14.5 inches of ground clearance. But the big thing you want to hear about is the four electric motors, the all-time all-wheel drive, the 750 horsepower, 400-mile range, three seconds 0 to 60 vehicle that can go up a 45% grade, tow 10,000 pounds, and go through 3 feet of water.
Narrator: However, there are a number of young electric automakers with plans to produce battery-powered utility vehicles. How is Rivian standing up to the traditional car industry that's making so much noise? They're not.
Matthew: So Tesla for its entire history has sort of flipped the bird to the traditional auto industry and said, "We're gonna do things our way. We're a Silicon Valley company. We're a tech company. We're not a car company. We're a tech company, and we're gonna do things the way that tech companies do stuff." Whereas what RJ and Rivian have done, what they've decided to do, is cozy up to Detroit. Get close to the traditional auto industry. Sort of model themselves after a big car company, even though they're not a big car company yet. They're not gonna disrupt the traditional industry. They're gonna be more like the traditional industry. They're gonna use a factory in Illinois that they purchased from a traditional automaker, Mitsubishi. They're gonna pair up with Ford. They might pair up with other automakers. I wouldn't rule that out. They showed their pickup truck and their SUV at the LA Auto Show. It was a big reveal, and they did it like a big car company would do their reveal.Narrator: Those only just hearing about this ambitious company would be surprised to know that Rivian has been around for more than a decade, quietly developing its product and acquiring sufficient financing. So why the lack of effort to generate hype like other start-ups and instead choosing to work behind the scenes?
Brian: Our philosophy is, always, always, always under-promise and over-deliver. We want to tell you that we're gonna do something. We want you excited about it, and then we want to just blow you away with what we actually did.
Mark Matousek: Part of the reason why they were quiet for so long was that they were working on their ideas and their vehicles very incrementally. Starting to unveil their vehicles towards the end of last year, about two years before they want to start production might be decent timing because on the one hand, it gives you enough time to build interest and get preorders and get some deposits from customers before you actually start production. But it's not so much time that it's gonna seem like you overpromised or under-delivered, or, you know, you're gonna lose all that hype by the time these cars actually come around.
Narrator: So Rivian has secured over a billion dollars in investments, partnered with major brands, modeled themselves after successful legacy automakers, and created two products that have captured the interests of adventure enthusiasts and EV lovers alike. Now for the real question: Should electric automakers like Tesla be nervous?
Matthew: Rivian is probably a "threat to Tesla" in the sense that they're gonna steal some bandwidth from people who are obsessed with electric vehicles. You know, so we won't just be talking about Tesla and Tesla's electric pickup truck, we'll be talking about Rivian and Rivian's electric pickup truck. So Rivian gets the free press as opposed to Elon getting all the free press. So they're not really a threat, but it's an extremely encouraging sign. I mean, you want to see companies that have that Tesla thing show up in the marketplace. You don't want to have a whole bunch of start-ups that just don't have really anything going on as far as their overall master plan goes. So to have another company come in and attract this level of buzz, you know, if you were threatened by this, you'd be out of your mind. You want this. You want to have really viable companies that can get it done, coming in and growing the electric-vehicle market. Rivian is starting to vacuum up some funding that's out there. Now, obviously Rivian's not a public company. Rivian's still at the kind of start-up investment stage, even though it's been around for a while, but it is starting to rake in some serious bucks.