Amazon is putting money into electric trucks.
The online retailer led a $700 million investment in Michigan-based electric pickup maker Rivian, the companies said Friday.
Rivian unveiled an all-electric pickup and an SUV at the 2018 Los Angeles Auto Show in November and plans to begin production of the vehicles in a factory in Normal, Illionois, next year. The company is headquartered in Plymouth, Michigan, not far from Detroit.
The total investment was split with Abdul Lateef Jameel Company, a Saudi Arabia-based importer and exporter that is already a major stakeholder in Rivian. Amazon (AMZN) invested a “significant majority” of the money, though, a Rivian spokesman said. Amazon (AMZN) declined to provide any details about the investment.
Rivian’s pickup and SUV are both based on a large battery-based engineering platform Rivian calls a “skateboard.” Both vehicles are designed to excel off-road with the help of four separate electric motors, one driving each wheel independently.
“The investment is a drop in the bucket for Amazon,” said Michelle Krebs executive analyst at Autotrader. “But it is huge for Rivian in terms of the amount of money and in terms of raising the profile of Rivian. Amazon is exploring ways to reinvent its delivery fleet, and Rivian’s electric-powered skateboard concept, which could carry a variety of body styles, offers an interesting possibility.”
Rivian’s pickup, called the R1T, will have a starting price of about $69,000 while the SUV, which can seat up to seven, will start at $72,000. Both vehicles should be eligible for the $7,500 federal tax credit, for electric vehicles. Both vehicles are expected to have a driving range of over 400 miles.