Amazon deal with Rivian signals faith in electric trucks

DETROIT — The last revolution in the pickup market came just a few years ago with the aluminum-body Ford F-150. Amazon is betting that the next one is already under way.

The retail and technology conglomerate is leading a $700 million round of investment in electric-vehicle startup Rivian, which plans to launch a lineup of all-electric utility vehicles by 2025, starting with a pickup in late 2020.

The investment pulls Amazon a little bit deeper into the auto industry, following close on the heels of a foray into self-driving vehicle technology.

It also bolsters an idea that's driving Rivian and captivating some investors: that pickups, one of the largest product categories in the U.S. light-vehicle market, may represent the industry's best opportunity to perfect and popularize electrified powertrains.

"We believe the next and potentially imminent major product frontier for EVs will be the highly lucrative and U.S.-dominated pickup truck market," wrote Morgan Stanley analyst Adam Jonas in a note to investors last week, following Reuters reports that Rivian was in talks with Amazon and General Motors about an investment that would value the startup at between $1 billion and $2 billion.

Jonas cited the economies of scale that could help bring down the cost of batteries, the form factor and the typical transaction prices of pickups. He also noted the high torque of EVs as a benefit for towing and hauling.

A Rivian spokesman told Automotive News GM isn't part of the announced investment round, which also includes Saudi auto distributor Abdul Latif Jameel Co., a long-term investment partner of Rivian. The company declined to comment on the breakdown of the $700 million investment and the company's valuation.

GM last week didn't dispute that it was in talks with Rivian. It said it admired Rivian's "contribution to a future of zero emissions and an all-electric future."

The Detroit 3 have broadly committed to more electrification, including for pickups. Jim Farley, Ford Motor Co.'s president of global markets, said the company would eventually be "electrifying the F series, both battery-electric and hybrid." Fiat Chrysler Automobiles last year launched the redesigned 2019 Ram 1500 with a mild hybrid system to boost torque.

A partnership with Rivian could help GM bring an all-electric truck to market without straining or moving internal resources away from its lucrative pickups and SUVs with internal combustion engines.

Tesla CEO Elon Musk has hinted at a pickup truck project, but hasn't shown a prototype yet.

Rivian, which took over Mitsubishi's shuttered Normal, Ill., factory, came out of a nearly decadelong stealth mode last year ahead of the debut of its R1T pickup and R1S SUV at the Los Angeles Auto Show.

CEO RJ Scaringe, speaking last month at the Automotive News World Congress, discussed partnering with other brands and potentially licensing technologies to other companies in 2019.

Jeff Wilke, who runs Amazon's worldwide consumer division, said the technology giant is "thrilled" to invest in Rivian. This month, Amazon contributed to a $530 million funding round announced by self-driving technology company Aurora.

The benefits for Amazon, Jonas says, include using the technology to shape electric delivery vehicles to support its own logistics efforts.

Amazon is working in-house on advanced vehicles. In January, the company unveiled the Amazon Scout, a six-wheel electric robot the size of a picnic cooler that's designed to roll slowly along sidewalks and deliver packages. It's testing the devices in a community near its Seattle headquarters.

Pete Bigelow contributed to this report.