Rivian is a new electric vehicle company founded by billionaire Peter Diamandis, who also co-founded the XPRIZE. Despite having a successful launch and securing $2 billion in capital from investors like Ford Motor Company, Rivian has still received some criticism for its business model.
The “rivian truck release date” is a blog post by the CEO of Rivian. He discusses the challenges that he and his company are going to face in the future.
RJ Scaringe grew up fascinated by the automobile business, peeking under parked automobiles as a youngster and hoarding spare parts in his room. Now, at the age of 38, he wants to cause a ruckus.
Rivian RIVN -0.64 percent Automotive Inc., his electric-vehicle manufacturer, poses a direct threat to Detroit’s auto titans. Mr. Scaringe became a millionaire overnight when the company’s first public offering last month attracted more money than any other IPO on a U.S. listing since 2014. Rivian’s stock has risen 47 percent since its IPO, making it more valuable than Ford Motor Co. F 9.61 percent or General Motors Co.
TSLA 1.32 percent, unlike competitor Elon Musk’s Tesla Inc. Mr. Scaringe does not have a major advantage over the competition; Rivian’s initial trucks will have to fight with Tesla and other established automakers’ electric cars. He’ll also have to deal with manufacturing issues as he attempts to put out three new models while simultaneously establishing and running new sales centres rather than depending on conventional auto dealerships. Rivian hopes to deliver 1,000 cars by the end of 2021, with more than 55,000 prospective consumers placing orders that will be fulfilled over the following two years.
In a report issued last week, Deutsche Bank analyst Emmanuel Rosner said, “Operational and financial concerns abound.” “It’s never been done before to ramp up manufacturing of three new models at the same time.”
Mr. Scaringe refused to speak for this piece, citing the so-called “silent period” that most firms go through following an initial public offering. Rivian intends to grow its manufacturing production, identify a location for a second assembly facility, and create future cars to flesh out its portfolio, he said in an interview done before the sale. He claims that electrification of the car sector is a global priority that will require more than 1 billion new automobiles.
Mr. Scaringe replied, “It’s absolutely astonishing.” “For us, the IPO provides a chance to expedite our ability to pursue some of that growth.”
Rivian and other electric car manufacturers will also get government assistance. By 2030, the Biden administration wants plug-in and hydrogen-powered automobiles to account for half of all new vehicle sales, and has sought to enhance current tax incentives aimed at narrowing the cost gap between electric and gas-powered vehicles. Investor euphoria has also been fueled by expectations of government backing for electric vehicles, according to experts.
‘Crazy like that,’ says the narrator.
Mr. Scaringe grew up on Florida’s “space coast,” where the path to Rivian begins. The Kennedy Space Center and the Cape Canaveral Space Force Station are also located in the neighborhood. His father established Mainstream Engineering Corp., a mechanical engineering firm that manufactures and designs equipment for the US government, including a refrigeration compressor and sophisticated heat pumps for spacecraft.
Mr. Scaringe nurtured his passion for autos as a teenager. With the help of a neighbor, he refurbished Porsches and kept extra parts in his bedroom. Tony Ferrer, a lifelong friend who first met Mr. Scaringe in high school, said he gained an encyclopedic knowledge of vehicles and their characteristics, similar to how others could recall baseball statistics. Mr. Scaringe would occasionally climb down beneath an unusual or unknown automobile in a parking lot with his pals to get a closer look at the underbelly, he said.
He was also a talented athlete who excelled in varsity high school basketball and grew to be well over 6 feet tall. He was tenacious during both pickup games and formal tournaments, according to classmates from high school and graduate school, focusing in defense and rebounding.
Mr. Scaringe followed in his father’s footsteps and pursued a career in business. Mr. Ferrer claimed his pals discovered this when he was gone from the Florida beaches where most of his friends congregated throughout the summer. Mr. Scaringe informed pals that he was working three jobs seven days a week when school returned. According to sources close to him, he utilized those funds to place a down payment on a property when he was 17, which he then leased out for income throughout high school and college.
Mr. Ferrer remarked, “RJ is insane like that.”
His passion for automobiles became stronger as he grew older. He proceeded to Massachusetts Institute of Technology after studying mechanical engineering and economics at Rensselaer Polytechnic Institute. At the Sloan Automotive Laboratory, named for GM Chairman Alfred P. Sloan, he worked on more fuel-efficient engines. In 2009, he completed his Ph.D. at MIT, just as the car industry was thrown into disarray by the financial crisis, which forced Chrysler LLC and GM into bankruptcy.
He moved to Florida the next year to create his own firm, with the goal of producing fuel-efficient hybrid sports cars and coupes. His company’s original name, Mainstream Motors, was the same as his father’s, and his first offices were in an underused area of his father’s corporate headquarters. He borrowed money by taking out a mortgage on the home he purchased in high school, which he subsequently sold.
The company was shortly renamed Avera Motors. Hyundai Motor Co. sued the firm in 2010, arguing that the Avera name was too similar to its Azera vehicle. Rivian was chosen as the company’s new name because it was inspired by the Indian River near Mr. Scaringe’s boyhood home. He blended the early half of River with the final part of Indian.
Mr. Scaringe, too, received assistance outside of his hometown. Former car leaders such as Rick Wagoner, the former CEO of General Motors, and Tom Gale, a former vice president of Chrysler, advised him. Both were elected to the board of directors of the fledgling business. Mr. Wagoner was astounded by how much Mr. Scaringe, then in his late twenties, understood about the auto business and automobile engineering, despite the fact that he had never worked for a major automaker or a parts supplier.
Mr. Wagoner said, “You occasionally find folks who know one or the other.” “However, knowing both is astounding for someone who has never worked in the sector and is so young.”
Abdul Latif Jameel, a significant Saudi Arabian vehicle distribution company, was an early investor. According to sources acquainted with the relationship, Mr. Scaringe met the group’s CEO Mohammed Jameel via an MIT link. Mr. Jameel was interested, and the two firms started discussing a possible partnership.
Mr. Scaringe, on the left, developed a friendship with the son of a Saudi vehicle distributor’s CEO. After climbing a flagpole in Jeddah, they pose for this photo.
Rivian (photo)
According to persons acquainted with the situation, Mr. Scaringe developed a strong connection with the family, notably Mr. Jameel’s son Hassan. Rivian rapidly abandoned its sports car concentration in favor of trucks and SUVs, two body shapes that were gaining popularity and producing huge profits for the industry, as it courted Abdul Latif Jameel.
As the two sides gained trust in one another, the connection became stronger. On a trip to Saudi Arabia, Hassan showed Mr. Scaringe a flagpole that his family had helped erect in Jeddah, the world’s tallest at 561 feet.
According to others who were briefed about the day, the two guys decided to climb it. In the 110-degree heat, Mr. Scaringe swapped his jacket and tie for a climbing harness and hard cap. Mr. Scaringe wears big black spectacles that give him a Clark Kent-like appearance, according to friends and coworkers, and a picture shot at the peak after the two-hour trek shows the two men smiling. The Abdul Latif Jameel group’s representative refused to comment.
The gears are shifting.
Mr. Scaringe tweaked his notion as time went on. To be closer to talent and suppliers, he relocated the firm to the suburbs of Detroit, the cradle of the United States car industry, in 2013. Around the same time, he chose to focus Rivian’s production on electric cars in order to reduce the company’s environmental effect while also targeting a market with limited competition. Some experts said they were apprehensive about the switch since there was so much uncertainty regarding electric cars’ long-term attractiveness.
Rivian bought a former Mitsubishi Motors Corp. plant in Normal, Ill., a tiny college town about 100 miles southwest of Chicago, in 2017, reinforcing Mr. Scaringe’s devotion to the notion. He, his wife, and their three boys would ultimately relocate. Rivian’s initial models were shown during a vehicle exhibition in 2018. Mr. Scaringe compared his concept for the firm to that of apparel retailer Patagonia, an outdoorsy, eco-conscious brand, in interviews and with potential partners. Patagonia fleeces were even favoured above more conventional outfits by him.
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Rivian was following in Tesla’s footsteps in many respects. Both companies bought their first facility from a venerable automaker. Rather of utilizing franchised dealerships, both planned to sell their vehicles directly to consumers and develop their own charging networks. Rivian also recruited a number of Tesla veterans as top executives, including the company’s executive vice presidents of production and product development.
At times, the relationship between the two upstarts became tense. Rivian was sued in California by Tesla, accusing it of stealing trade secrets while recruiting Tesla personnel, and the case is currently pending. Rivian said in a document that its competitor’s lawsuit was without substance. “Perhaps they should be forced to produce at least one car per billion dollars of value *before* the IPO?” said Tesla CEO Elon Musk in a tweet regarding Rivian. Rivian started providing pickups in September.
In other areas, Mr. Scaringe wanted to take a different route than Tesla. He was more amenable to joint ventures that brought in a lot of money. Rivian attracted Amazon.com Inc. as an investor and client, with the e-commerce behemoth spearheading a $700 million fundraising round and subsequently buying 100,000 Rivian-developed electric delivery vehicles. Mr. Scaringe also persuaded Ford to invest $500 million in the company in return for a share in the company and promises to work on a model based on Rivian’s engineering (the two auto makers since scrapped their plans to build a model together).
Following the announcement of Ford’s first $500 million investment in Rivian, Mr. Scaringe and Ford Executive Chairman Bill Ford pose.
Ford Motor Company/Reuters photo
He was able to get more than $10.5 billion in private finance in the end. Rivian was able to hire additional individuals as a result of the funding; according to business papers, the firm now employs around 10,500 people, up from just under 1,000 two years ago. Its headquarters were also relocated to Irvine, California.
Asad Hussain, an analyst at PitchBook Data Inc., stated, “Rivian has been tremendously effective at selecting the investors they’ve brought in.”
Mr. Scaringe controlled around 1.7 percent of the company’s shares after the IPO, valued at nearly $1.8 billion as of Friday’s closing. If the firm succeeds, Mr. Scaringe will be awarded much more. Rivian’s board of directors handed him a stock award worth $241 million, which entitles him to up to 27 million more shares over the following decade provided the business meets specified criteria. If all of Mr. Scaringe’s options vest, he will possess almost 49 million shares.
His current goal is to meet investor and customer expectations while scaling up manufacturing, releasing three new models, and expanding Rivian’s own sales and support organization. Rivian’s first model, the R1T, was unveiled in September, and it’s a futuristic-looking pickup with an optional pullout kitchen with a basin and induction burner for camping. This year, an SUV and a delivery van are still on the way.
A former vice president of marketing and sales is suing the corporation, saying that she was subjected to gender discrimination. Rivian had manufacturing quality issues, according to the lawsuit, and had internal conversations about boosting car costs to avoid a loss. Rivian has refused to comment on the complaint explicitly.
Mr. Scaringe has previously said in interviews that creating Rivian was a difficult and emotional process. Mr. Scaringe stated in a podcast aired by the Lean Enterprise Institute last year, “It was like anything else, the only way to start was to start.” “There are a lot of U-turns, twists and turns, and stomach blows.”
Ben Foldy can be reached at [email protected]
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