Amazon’s investment in electric vehicle startup Rivian will engineer Tesla’s first challenge in the EV market aside from possibly being the second most significant milestone in electric vehicle manufacturing after Tesla.
After rumors of ongoing talks between Amazon and General Motors with Rivian over investments earlier last week, it was later confirmed that the US retail giant has invested $700 million in the US electric pickup manufacturer. Amazon-Rivian investment may prove to be the “most important auto moment” throughout 2019, according to Morgan Stanley’s research analyst Adam Jonas.
While GM is still weighing options of possible investment in the Plymouth Township-based EV startup, sources familiar with the matter say any announcement would take some time to happen. However, some analysts have criticized GM’s move to invest “in an unknown product from an unknown company,” whereas the company’s internal crises persist. Others believe the investment may indicate “GM’s prescient strategic vision.”
“We admire Rivian’s contribution to a future of zero emissions and an all-electric future,” GM said in public statement, inciting a potential deal with the EV startup.
Rivian’s electric pickup could be on sale in 2020
Rivian’s vision is to manufacture all-electric pickup and SUV, each supposedly covering a range between 250 to 400 miles at a charge. Amazon’s investment will provide Rivian the capital to offer an all-electric pickup in 2020.
At the other end, Amazon will benefit from Rivian electric vehicles as it looks up to remodeling its transport and logistics expensive. The company was reportedly cutting off CRaP items from its store to bloat profit margin – a strategy that would eliminate bulky or heavy items from the company’s store. The use of Rivian all-electric pickups would transform Amazon’s approach in transportation.
The emergence of other EV manufacturers is foreseeable and, the growing accessibility and affordability of batteries will force the existing car manufacturers to eliminate hybrid programs. But while these competitors join the market, Rivian and Tesla are poised to have a good share of the estimated 18 million EV sales in the global market by 2030. Amazon’s presence will bring a difference due to the retail company’s existing dominance and level of encroachment into other sectors.
Tesla’s major challenge would be Amazon’s interest and the company’s “EV dominance is now being challenged,” said Jonas.
There’s no doubt about huge success if GM’s impending partnership with Rivian pulls through. The Detroit, Michigan-based car manufacturer’s reputation in the market will not only inspire consumers but transfer the already existing trust to Rivian design. Based on the partnership terms, GM could resuscitate its vision to produce all-electric cars through Rivian’s technology.
Amazon is making a bold move directly into electric car manufacturing just when we were about to believe that Tesla’s dominance in the market could only grow wider. “Amazon and Tesla could be seen as the competitors here, not collaborators or partners in advancing transportation in the future,” Jonas added.
