Rivian is probably the only legitimate electric vehicle startup in the industry right now, aside from Tesla.
In the past, many people had thought that Tesla was just a "fraudulent" company that was destined to fail. By turning itself into a highly profitable business, Tesla was able to prove everyone wrong. Its CEO Elon Musk was able to also successfully become the world’s richest person. But does Tesla’s success story actually mean that we should have more faith in electric vehicle startups?
The answer to this question is not quite as simple as it seems.
In reality, most vehicle startups have turned into major disappointments. The success of Tesla has generated an investment rush from people who are desperately seeking for the “next Tesla” and “Tesla killers.” This led to the creation of many electric vehicle startup scams from around the world which prompted investors to become more cautious about electric vehicle startups. The company that has the highest possibility in success under these troubled times is Rivian.
We had previously introduced Rivian in the article, “How Does Electric Vehicle Startup Rivian Handle Amazon’s 100K Order Without Selling a Single Unit?”. R.J. Scaringe, founder of Rivian, may not be as charismatic as Musk, though what he has is the connection from the Silicon Valley to Wall Street, and from Japan to the Arab world, which prevented Rivian from going through the early crumbling phase like Tesla did, and facilitated the order of 100K electric trucks from Amazon from the get go.
Something Big is Happening This Year
2021 will be a critical year for Rivian, as the startup needs to deliver 3 electric vehicle models within the year, as well as initiate operation in the factory bought from Mitsubishi, and get listed without the help of SPAC.
Rivian will start to deliver the electric trucks ordered by Amazon this year, with 10K units of special models delivered first, followed by the completion of the 100K order by 2030.
▲ Amazon electric trucks manufactured by Rivian.
The R1T electric pickup truck that is most anticipated by US fans is priced at approximately US$70K with an existing order quantity of more than 30K units that will begin delivery starting from June this year. A successful delivery of this vehicle that combines the intrepid look of traditional pickups with electric power and the auxiliary functions of technology will stir up a storm within the US automotive market.
▲ R1T configured with camping kits.
Another model is the R1S three-row SUV that is prepared for a global launch at an approximate cost of US$70K, with delivery starting from August this year. This model is the second largest electric SUV after the Model X of Tesla.
▲ R1S and R1T (silver).
A total of 10K units of Amazon trucks, 6000 units of R1T, and 4000 units of R1S by the end of 2021 should be the more rational calculation for a startup that has to deliver three models at the same time despite having yet to deliver a single vehicle, as well as considering the dimension of the Illinois plant.
The aforementioned estimation is calculated under a sufficient supply of chips and batteries, though Rivian will probably fail to acquire excessive material due to potential supply issues. Thus, another reduction of 15K units in the total delivery should not be too surprising.
In light of its lower than expected deliveries, one might be tempted to call Rivian out and to accuse it of being just another one of those startup “frauds” that cannot deliver on its promises. However, since having a plant is already considered winning half of the battle, and a delivery (regardless of how many) is deemed a victory, what Rivian has done is actually quite impressive.
▲ Rivian R1S being assembled. (Source: Twitter)
The delivery result of Rivian is extremely important as the company is expected to implement an autonomous IPO by the end of the year instead of using the common SPAC method, and the purpose of the IPO is evident since the factory is expected to produce 40K units next year, though the annual target for the company is 300K units, so additional funds would be required for the extra plants in Europe and Asia.
Rivian has once again demonstrated another difference compared to Tesla. Rivian is not worried about funds since the company has currently accumulated more than US$1.5 billion from investors such as Amazon, Cox, Ford, Standard Chartered, and Sumitomo Mitsui Banking Corporation, and is expected to sit at a market value of roughly US$50 billion after being listed.
All ambitions and grand prospects await for the delivery in June. The seemingly bright future of Rivian must be treated with caution, though, since the only automotive startup in the industry that has managed to make an actual breakthroug is Tesla.
(Photo source: Rivian)