Rivian: The Electric Vehicle Startup Poised to Challenge Tesla's Dominance

 

The Rivalry Between Bezos and Musk

The feud between Jeff Bezos and Elon Musk has been brewing for years, centered around their competing space travel ambitions. Bezos' Blue Origin has been at odds with NASA over the agency's decision to contract with Musk's SpaceX to build a lunar lander. Now, the rivalry is spilling over into the electric vehicle (EV) space as Bezos throws his weight behind Rivian, the startup he believes can take on Tesla.

Rivian's Humble Beginnings

Rivian is the brainchild of MIT PhD holder Robert Scaringe, who founded the company in 2009 at the age of 27. Initially, Scaringe's plan was to create a sports car to compete with Tesla's original Roadster. However, he soon realized that he didn't want to go "toe-to-toe" with Tesla and instead decided to create his own unique brand.

In 2011, Rivian unveiled a sporty coupe prototype, but Scaringe ultimately scrapped that idea, realizing that Tesla was not focusing on SUVs and more rugged vehicles. Recognizing this gap in the market, Rivian shifted its focus to developing luxurious, battery-powered vehicles designed for the great outdoors.

The Rise of Rivian

By the end of 2017, Rivian had two alpha prototypes to showcase, which eventually became the R1T pickup and R1S SUV, debuting at the LA Auto Show in 2018 with production scheduled to begin in 2020. Both vehicles were described as ready for rough terrain and semi-autonomous, with plans for the next generation to be fully autonomous – a space Tesla has been trying to compete in for years.

The prototypes caught the attention of Ford, which invested $500 million in the company, although the contract was later terminated during the COVID-19 pandemic. However, the relationship between the automakers has reportedly remained strong, and they might collaborate again in the future.

Bezos Backs Rivian

Around this time, Rivian also caught the eye of Jeff Bezos. In 2019, Amazon took a 20% stake in the company and ordered 100,000 delivery vans. Bezos had a big plan in mind – to bring his two pet projects, Blue Origin and Rivian, onto the global stage at the same time. This was evident when the billionaire arrived at the Blue Origin launch pad in a Rivian truck before blasting off in his rocket, a well-calculated and strategic product placement.

Rivian's Impressive Market Response

The market's response to Rivian has been nothing short of astonishing. While Tesla's valuation was a respectable $2 billion at a similar stage, Rivian's valuation is around $55 billion – a 25-fold increase. Just two days after its initial public offering, Rivian reached a market value of over $100 billion, making it the world's fifth-largest automaker by market cap, despite having delivered only a few electric vehicles to customers.

This valuation has made Rivian a legitimate option for institutional investors who previously only had Tesla to play the EV space. As Nicholas Kolas, co-founder of DataTrek Research, noted, the fact that an 11-year-old company with practically no cars on the road can suddenly become more valuable than GM and Ford is a clear indication that Rivian means business.

Rivian's Unique Approach

While Tesla is known for its futuristic and borderline weird cars, Rivian has taken a different approach. The company's trucks, the R1T and the R1S SUV, are designed to be more familiar and utilitarian, appealing to a broader range of customers. This contrasts with Tesla's focus on urban car markets, leaving a gap that Rivian is poised to fill.

As David Kirsch, a professor at the University of Maryland's business school, has stated, Rivian's team, product, and investors all look promising, and the company has managed to capture the spotlight from Tesla, even if just for a moment. This suggests that Rivian may indeed turn out to be Tesla's worst nightmare and the American purchaser's dream.

Conclusion

The rivalry between Bezos and Musk has now extended into the EV space, with Rivian emerging as a serious challenger to Tesla's dominance. Rivian's unique approach, strong backing from Bezos and other investors, and impressive market response have positioned the company as a formidable competitor in the electric vehicle market. As Tesla pushes back the launch of its Cybertruck, Rivian appears poised to beat them to market with the R1T, setting the stage for an epic battle between the two companies in the years to come.