If financing from Ford Motor Co. and Amazon.com Inc. weren’t reason enough to take notice of Rivian Automotive Inc., a six-figure order declared by Jeff Bezos, the Amazon Chief Executive, has raised the electric-vehicle start-up — all before its first churned out SUV or truck has rolled off the assembly line.
The billionaire publicized plans Thursday to buy 100,000 electric vans from Rivian, custom-made for Amazon Prime deliveries, as part of an Amazon environmental project considered to meet the goals of the Paris climate agreement ten years early. The deal follows a $700-million investment in Rivian that the online trader led in February.
The order is a major accomplishment for a company that is planning to launch its R1S sport utility vehicle and R1T plug-in pickup late next year. Though monetary terms of the deal weren’t released, Amazon’s deliberate purchase places Rivian with a major customer way before CEO R.J. Scaringe begins to seek information from consumers who’ve been reluctant to go electric. Sector leader Tesla Inc. didn’t deliver more than 100,000 vehicles in a year until 2017, almost ten years after the advent of its debut model, the Roadster.
“It’s a very significant agreement,” Mike Ramsey, an automotive analyst with consultant Gartner Inc., said of Bezos’ statement. “It means we have a fresh automaker, for real.” Amazon plans to begin making supplies with Rivian vans in 2021. By the end of the following year, Rivian anticipates to have 10,000 vehicles on the road, said Amy Mast, a spokesperson for the carmaker. The vans will be constructed at the company’s plant in Normal, Ill., bought several years ago from Mitsubishi Motors Corp.
Amazon’s vehicles will share fundamental mechanisms with the R1T and R1s, including the battery, but the vans will have a distinctive body, software, and interior, Mast said.
Two months after Amazon announced its investment in Rivian, Ford said it would introduce $500 million. This month, the company took in $350 million from Cox Automotive, the proprietor of online car-shopping sites and Kelley Blue Book and Autotrader and vehicle auction firm Manheim.
“With the enormous investments from companies like Amazon and Ford, are we witnessing a new business model for a diverse kind of company in the auto industry?” Ramsey said of Rivian. “It’s a contract producer that also has its own product.”