Irvine-based Rivian is aiming for a triple EV debut in a row that defies history – Orange County Register
By Keith Naughton and Ed Ludlow | Bloomberg
Rivian Automotive, the Amazon.com-backed electric vehicle startup based in Irvine, runs the automotive equivalent of a three-ring circus: it tries to bring three new vehicles to market in a factory where the last car was six years ago was produced.
The push reflects a desire to stay ahead of battery-powered trucks from more established competitors, including a General Motors Hummer pickup and Tesla’s Cybertruck. Rivian has high hopes for its pickup truck and sport utility vehicle, but relies on an Amazon-developed van as a guaranteed source of income, according to people familiar with the company’s strategy.
Rivian hasn’t publicly announced its production targets, but these people said the startup is building an annual capacity of about 300,000 vehicles and intends to produce up to 40,000 in its first full year – or nearly 800 a week on average. This is comparable to the nearly 5,000 vehicles per week Tesla produced at its Fremont plant in 2018 – the first full year of production for the mass-market Model 3 sedan.
Amazon and Ford Motor Co. offer financing and operational advice, but producing this scale in three different models is a huge challenge for an untested company.
“It’s a giant step from prototyping to assembling a thousand vehicles a week,” said Mark Wakefield, director of automotive practice in America at AlixPartners LLP, a start-up consultant. “It’s hard to overemphasize this point.”
A Rivian spokesman declined to comment on its production goals.
The company’s three vehicle game is set in a 2.4 million square foot factory 38 miles east of Peoria, Illinois, in the central part of the state. The former Mitsubishi Motors Corp. has been retrofitted with advanced robotics and other production technologies to keep up with the innovation of the vehicles to be manufactured there.
Engineers, technicians and other workers are raving about the facility to keep the schedule from slipping further after COVID-19 and supplier-related delays last year. They took over entire hotels in the university town of Normal, Illinois, where the factory is located. The pre-production designs of Rivian’s R1T pickup and R1S SUV are already moving on a purpose-built high-tech pilot line while engineers fix the bugs.
“Not only do they bring vehicles to market, they also bring a system to market,” said Jeff Schuster, President of Americas and Global Vehicle Forecasting at LMC Automotive. “This is how their risks are stacked.”
In addition to the complexity, CEO RJ Scaringe plans to go public by the end of this year and is looking for locations for a European factory, according to people familiar with the plans. Rivian is expected to be worth around $ 50 billion when it goes public, they said.
The company’s ability to carry out its daring plans rests largely on its ringmaster. Scaringe, 38, who holds a PhD from the Massachusetts Institute of Technology, is still months away from his goal of making electric vehicles that were discontinued 12 years ago when the company was founded. He later secured seed capital from early-stage Saudi and Japanese interests that shared his vision.
Even before making his first car or truck, Rivian made a name for himself for his innovative architecture for flexible vehicles – and his ability to raise funds. Scaringe’s vision for zero-emission SUVs and trucks has attracted more than $ 8 billion in investment from corporate partners and Wall Street institutions such as D1 Capital Partners, Fidelity Investments and T. Rowe Price Group.
Discouraging historical opportunities
In the high-stakes business of automotive engineering, the launch of just a single model has bankrupted many competitors, including DeLorean and Fisker Automotive. And even the market leader for electric vehicles, Tesla, started with just one car. But starting this summer, Rivian plans to pump out its first battery-powered pickup, SUV and van within a few months.
“Getting started on your own is a big deal for an EV startup, but Rivian takes on the added complication of having three models launched in the same year,” said Sam Fiorani, vice president of global vehicle forecasting for researcher AutoForecast Solutions. “How many American auto companies have started and been successful since World War II? It’s a list from one – Tesla. “
The CEO’s ambition exceeds what Elon Musk achieved with Tesla. This started with the low-volume roadster before slowly increasing production and expanding its range. Founded in 2003 and headquartered in Palo Alto, which is currently valued at around $ 550 billion, the company only topped sales of 40,000 vehicles in 2015 and took another three years to grow annual vehicle sales to over 300,000.
The pickup should start in June, followed by the SUV in August and the Amazon van in the fall. The three models are all built on the same electric “skateboard” platform mounted on two special lines. Production then branches out further and the vehicles are equipped with so-called “cylinder hats” that distinguish them as pickups, SUVs or delivery vans.
Include investor expertise
Tesla repeatedly missed production deadlines when it first tried to mass-produce its best-selling Model 3 sedan. CEO Musk highlighted this difficulty in a March 4th tweet about the challenges newer automakers are facing: “Prototypes are easy, production is difficult and positive cash flow is unbearable.”
But unlike this EV kingpin who despised traditional automotive orthodoxy and learned the hard way, Rivian has drawn on outside expertise in the form of two of its main investors: Amazon and Ford.
Amazon provided support last spring to restore activities at the automaker’s plant after the pandemic temporarily shut down operations. Within a decade, 100,000 delivery vans were ordered from Rivian, 10,000 of them by the end of 2022.
Ford gave early advice on manufacturing and engineering. A Ford subsidiary helped with the giant dies that stamp out the body panels on Rivian models, said people who knew about the companies.
Representatives from Amazon and Ford had no comment.
Rivian was planning a fourth vehicle – an upscale electric vehicle to be jointly developed with Ford for the Lincoln luxury line – but abandoned those plans in April, blaming the pandemic. Ford says it still intends to build a model with Rivian, but when and what type of vehicle is undecided.
“You have your hands full,” said Hau Thai-Tang, Ford’s chief product officer, in a recent interview. “We have to let them get through first.”