Both Amazon and Ford reported quarterly earnings losses this week, citing their investments in Rivian Automotive.
Amazon on Thursday reported a rare quarterly loss of $3.84 billion, owing entirely to a $7.6 billion loss in value of its stock investment in Rivian Automotive. Same with Ford, which said it lost $5.5 billion on its Rivian holdings in the quarter, causing it to report an overall loss of $3.1 billion.
Why did a publicly obscure startup cause headaches for such U.S. business giants?
What is Rivian?
Rivian Automotive is an electric truck manufacturer that owns a former Mitsubishi plant in Normal, Illinois.
It was founded by RJ Scaringe, who earned his Ph.D. from the Massachusetts Institute of Technology in 2009. In 2011, Scaringe scrapped plans to build a coupe, noting the auto industry’s shift to pickups.
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Why did Ford and Amazon invest?
Rivian’s promise, and Scaringe’s vision and connections, have always attracted big investors. Scaringe’s MIT connections linked him with the Jameel family of Saudi Arabia, which, along with other investors, helped the company raise $450 million.
After a splashy truck unveiling that even attracted singer Rihanna in conjunction with the L.A. Auto Show in November 2018, Amazon announced in February 2019 that it would lead a $700 million investment in the company. That April, Ford said it was investing $500 million.
Ford was interested in battery development and at one point planned to jointly develop a pickup, but the latter plan was scratched. Amazon has ordered 100,000 electric delivery vans.
Once thought to be a potential competitor to Tesla, Rivian’s other investors include big names such as Vanguard, T. Rowe Price and Blackrock.
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Wanda Beck
View More PostsWanda Beck is a technology reporter who covers the intersection of business and crypto. A native of Boston, Wanda spent almost five years at The Boston25News, where she wrote extensively about the media industry's struggle to adapt to the Internet.
