General Motors and Amazon.com are in talks about investing in electric-vehicle maker Rivian Automotive LLC in a deal valuing the startup at US$1 billion to US$2 billion, said people familiar with the matter.
The Plymouth, Michigan-based startup is working on electric pickup and sport utility vehicles and debuted concept versions at the Los Angeles Auto Show in November.
Talks are progressing but a deal isn’t close yet, said one of the people, who asked not to be identified because the negotiations are private.
Trucks and SUVs are gas-guzzling cash cows for Detroit automakers. An investment in Rivian could help GM get an electric pickup to market faster and help ward off upstarts such as Tesla.
For Amazon, investing in Rivian would signal an ambition to shift a portion of the massive vehicle fleet that delivers its packages to zero-emission vehicles.
“Rivian is being cast in the same light as Tesla, a startup that’s outside the inner circle of the auto industry, and that’s appealing to GM,” said Jeff Schuster, senior vice-president of forecasting at researcher LMC Automotive. “GM could clearly do an electric pickup itself — it has the technology and a strong base of pickup buyers. But they don’t have Rivian’s image and separation.”
GM has dropped hints that a plug-in pickup could be a possibility. When asked at an investor conference in January whether the company will sell one, CEO Mary Barra replied to an analyst: “You’ll have to stay tuned.”
“We admire Rivian’s contribution to a future of zero emissions and an all-electric future,” Pat Morrissey, a GM spokesman, said in a statement. Representatives for Amazon and Rivian declined to comment.
Reuters reported the talks between the three companies earlier Tuesday.
Like Tesla, Rivian acquired a vehicle assembly plant for a bargain from an established automaker. It bought a factory in Illinois for just $16 million from Mitsubishi Motors in early 2017. Tesla builds its electric cars at a facility shuttered by Toyota after GM pulled out of a joint-manufacturing venture as part of its 2009 bankruptcy.
Rivian executives have said their R1T electric pickup will be able to reach 100 km/h from zero in three seconds and tow 11,000 pounds. Deliveries are expected to start in 2020.