Author: Dayan
As a pure electric pickup truck brand in the United States, RIVIAN is preparing to go public with an expected valuation of $70 billion, which will surpass Ford Motor Company and Stellantis, the merger of Chrysler and PSA Group.
From a market value perspective, RIVIAN will become the third largest car company in the United States, second only to Tesla and General Motors. In July of this year, RIVIAN’s first pure electric midsize pickup truck, the R1T, will be launched, which is also the biggest driving force behind RIVIAN’s significant increase in valuation since the last financing in January.
With the launch of the R1T, can RIVIAN’s market value continue to rise and become the next Tesla in the field of new energy vehicles in the United States, which has attracted attention from all parties?
Amazon and Ford behind RIVIAN
Currently, the most well-known shareholders under RIVIAN are Amazon and Ford.
For Amazon, the rapid expansion of its own business means a huge demand for logistics vehicles. Currently, the US government has a relatively large policy support in the field of pure electric vehicles, and investing in a pure electric pickup truck to expand its own business upstream and downstream is a good choice. In addition, one point that cannot be ignored is that Amazon previously acquired the self-driving startup company ZOOX. In the future, it is not impossible to integrate ZOOX’s autonomous driving platform with RIVIAN’s pickup trucks.
According to relevant reports, Amazon’s spending on warehousing and logistics costs in the first quarter of 2020 was as high as $11.5 billion, accounting for more than 26% of the first quarter’s operating costs. If Amazon can realize the self-manufacture of logistics vehicles and popularize autonomous driving technology, it will play an immeasurable role in improving the overall profit margin of Amazon.
As for Ford, they lack a high-end pickup truck brand in their lineup. By investing in RIVIAN, not only can Ford maintain the possibility of future cooperation with RIVIAN, but it also fills the market gap of the F-150 Lightning. From Ford’s perspective, facing Tesla, which is constantly making moves in the field of pure electric pickup trucks, joining forces with all possible allies to curb Tesla’s brutal growth is its top strategic option.
The lively American electric pickup truck marketTranslate the following Chinese text written in Markdown format into English using professional language, preserving HTML tags in Markdown and showing only the corrected and improved parts, without explanations.
Recent electric pickups are extremely popular in the United States. Apart from RIVIAN’s first model R1T which has been announced and will be officially delivered this July, both Ford’s F150-Lightning and General Motors’ previously launched Hummer as well as Tesla’s Cybertruck are expected to excite many consumers.
Pickup trucks and SUVs are the backbone of the US car market. To establish a brand name, RIVIAN chose to launch with high-end pickups. As the brand strength grows, the product line will continue to expand.
Looking at the strategies, Ford’s pickup truck is aimed at the general public given that the F Series pickup truck is the mainstay of Ford’s sales and profits. Ensuring stable sales volume is crucial for Ford. For General Motors, resurrecting the Hummer brand and turning it into a pure electric pickup truck can not only pursue greater profits but also improve the overall image of the entire General Motors. On the other hand, if Hummer performs well in the pure electric pickup truck market, it will be a good choice to list Hummer separately.
As for Tesla, it appears to be most greedy. The Cybertruck model has a wide price range, which not only enhances the brand image through high-end models but also expands sales volume by lowering the price of entry-level models.
Planning to develop China and European markets, RIVIAN has a long way to go
For RIVIAN, in addition to establishing a foothold in the US market, China and Europe, which are two key areas for new energy vehicles, are also strategic markets that need to be heavily developed and managed.
At the product level, in addition to the pure electric pickup truck R1T, RIVIAN is also launching an SUV model R1S SUV. For RIVIAN, it is almost impossible to change the local consumption culture solely through its own strength in the European and Chinese markets where the pickup truck culture is not prevalent. Therefore, the best choice of opening these two markets is to use pure electric SUVs.
However, judging solely from the appearance, R1S doesn’t have much competitive advantage: the mediocre design does not stand out. The system capabilities established by Chinese new car-making companies in autonomous driving, battery swapping technology, customer operation and maintenance, and intelligent networked ecosystems are not available to RIVIAN. As for the conservative European market, Volkswagen’s MEB system may overthrow Tesla, and RIVIAN doesn’t know whether or not it can rely on Bezos’ halo to open up foreign markets and enhance its brand recognition.
So, we don’t know if there are promises to shareholders and investors behind RIVIAN’s eagerness to IPO, but what is certain is that, given RIVIAN’s current status, it’s almost impossible to expand its market in Europe and China.
Is RIVIAN’s future promising?
For RIVIAN, the biggest plus currently is the order of 100,000 electric pickup trucks placed by its major shareholder, Amazon. The beginning is always tough, and for a startup, this order is very important in helping the company establish itself in its early days. At the same time, this order also boosts consumer confidence.
Tesla, which is now shining brightly, also faced several close calls with bankruptcy in its early days, and no one had high expectations for the new power to enter the auto industry. However, as Tesla gradually established itself and became the largest auto company in the world by market capitalization, people’s views on electric vehicle startups have undergone fundamental changes.
From the latest product highlights, it seems that the R1T will make one’s blood boil, as each wheel is driven by an independent 147 kW (200 PS) motor. Through four motors, the overall maximum power of the vehicle can reach 588 kW (800 PS), and it can easily accelerate to the 3-second club for the 0 to 100 km/h sprint, producing an extreme driving experience for users as in supercars.
Regarding the interior and exterior design of the R1T, especially in terms of appearance, it may not be as exciting as the futuristic Cybertruck, and its style is closer to the Ford F-150 Lightning.
We still don’t know if the R1T will provide us with major surprises in terms of autonomous driving and intelligence, but based on the information currently available, it will be difficult to compete with Tesla in terms of autonomous driving. Therefore, to further increase RIVIAN’s market value, it still needs to seek greater breakthroughs in underlying technology, as Tesla did. Otherwise, even with considerable sales, if investors look at RIVIAN’s valuation as they do with traditional automakers, the sustainable growth of its market value is not that optimistic.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.