Amazon.com Inc said on Friday it would lead a $700 million investment in U.S. electric pickup truck startup Rivian Automotive LLC, in the e-commerce giant’s biggest bet on technologies with potential to reshape the automotive sector.
The deal represents a major endorsement of Rivian’s electric vehicle technology by the world’s largest online retailer. Amazon is hoping Rivian will assist it in its development of delivery vehicles that will bolster its logistics network, according to a person familiar with the matter who asked not to be identified discussing the confidential strategy.
The Rivian deal comes as its much larger electric car manufacturing rival, Tesla Inc, struggles to stabilize production and deliver consistent profits as it ramps up its Model 3 sedan, with pricing ultimately aimed at giving it mass market appeal.
Tesla Chief Executive Elon Musk told investors in August that an electric pickup is “probably my personal favourite for the next product” from the company. But he has spoken only in general about a potential launch, saying that it would happen “right after” Tesla’s Model Y, which the company has targeted to start production in 2020.
Rivian’s existing financial backers include Saudi auto distributor Abdul Latif Jameel Co, Sumitomo Corp of Americas and Standard Chartered Bank. Some existing shareholders participated in the funding round, Rivian said, stressing that it will remain an independent company.
(According to the sources)