Amazon and General Motors to back Rivian
Amazon (AMZN) along with General Motors (GM) is in advanced talks to invest in Michigan-based Rivian Automotive, which wants to become the first US electric pickup automaker. Reportedly, Amazon and General Motors might strike a deal by Friday, valuing the company at around $1 billion to $2 billion. The deal, if it happens, would give both the companies a minority stake in the start-up company.
Why invest in Rivian?
Rivian is currently working on zero-emission, all-electric trucks and SUVs, which is attracting the interest of established companies like Amazon and General Motors. The Rivian deal could help General Motors to push electric pickups to markets faster and compete with electric car manufacturing rival Tesla (TSLA), which has recently rolled out its flagship Model 3 sedan and has targeted to start production of Model Y in 2020. On the other hand, Rivian plans to begin selling its R1T electric pickup in the fall of 2020, which can hit a speed of 60 miles per hour in just three seconds.
Investing in Rivian could help Amazon expand in the automotive industry and help it to make deliveries through zero-emission vehicles. The autonomous car market is growing in popularity, and thus tech-biggies like Alphabet’s (GOOGL) Waymo, Intel, Qualcomm, and NVIDIA (NVDA) are trying to grab a bigger share of the pie.
If a deal materializes, Rivian would be Amazon’s second auto investment in February. Amazon recently invested in a self-driving car start-up named Aurora. Amazon has been developing its autonomous vehicle technology. Last year, Amazon joined hands with Toyota to help deliver food using self-driving cars, though the company has already been hauling cargo in self-driving trucks. According to Boston Consulting Group, the partially autonomous cars market share is expected to grow to $42 billion by 2025 and $77 billion by 2035.