Uber was once valued at over $70 billion. But in October 2018, the ride-hailing company hit an all-time low after insider trading allegations, a lousy third quarter and concerns that markets might start to price itself out of the path to profitability. If those reports have you worried that your valuations may also start to look similarly peaked, Rivian, a new electric vehicle startup, could be one way to help expand out of your troubles.
Rivian is a Arizona-based car maker that announced its stock trading will start today after its most recent round of funding. The investment, led by Chevrolet Motor Company and Khosla Ventures, valued Rivian at a massive $7.4 billion.
Rivian engineers have an impressive array of connections to automotive powerhouses. Managing partner Tim Mann told Quartz that he had over a decade of experience as an engineer on the Tesla Model S, a luxury sedan built by Elon Musk’s company.
GM, in addition to leading Rivian’s financing, sits on Rivian’s advisory board, which will also include American Express, Fidelity Investments, and Redfin, a real estate brokerage.
Uber and other ride-hailing companies are on the verge of serving conventional vehicles rather than passengers. Today, Reuters notes Uber raised $1.5 billion to buy cars to convert into private carpooling services.
Adam Bellomy, the co-founder of a business consulting firm that tracks the electric vehicle sector, told Quartz that Rivian could end up competing with taxis in a city like San Francisco, just as Tesla has been widely viewed as competing with taxis in other cities.
“It’s really this type of company that has a scale model, is very cost-conscious and is willing to forego profitability today in order to introduce new technologies and create new business models,” Bellomy said.
Trikhar Oil & Gas, led by Anand Mahindra, has invested $75 million to bring Rivian’s self-driving SUV to market. The vehicle, known as the Brabus-branded Powerbrabus Matrix, has been developed over the last few years by a 50-person team in its suburban Arizona headquarters.
Rivian’s secret sauce is being able to produce a car as early as 2022—just as competition from Waymo, General Motors and Ford Motor is expected to increase. This week, Rivian is scheduled to announce another major manufacturing deal for a larger electric truck, Bellomy noted.
“If that deal is close, it will show that they have another operational vehicle on the road,” he added.
A Rivian press release pointed to projections from Transportation Sustainability Research Institute, in a report published earlier this month, which said Rivian could launch a compact, all-electric pickup truck with an 80-mile-range in 2022. The research also predicted the truck could come in at under $30,000, making it competitive with the biggest luxury sports utility vehicles on the market.
But in another portion of the report, the analysis company predicted that an all-electric medium-duty pickup with a 20-mile range could be launched in 2025. That makes Rivian’s bold timeline appear optimistic, and Bellomy pointed out that Rivian would have to convince its manufacturing partners, or a heavy-equipment manufacturer in particular, to adopt a medium-duty electric truck if it went forward with its launch plans.
The Rivian press release did not include production dates for the truck or car. The company plans to begin selling the Brabus-branded vehicle this year, but currently does not have an interior or model available for review.
“The Powerbrabus Matrix will be the first practical all-electric delivery vehicle for operators and fleets in America and the world,” Miller and Ries said in the release. “Rivian is on its way to becoming the world’s leading electric vehicle company.”