If you’ve ever driven an electric or plug-in hybrid vehicle, then you know that they don’t get the same amount of fuel efficiency as their gas-powered equivalents. The electric versions also have to be charged on the highway before you can drive anywhere, and that can be a very expensive proposition.
Former Tesla employee Nikola Rivian, who spent most of his career at Elon Musk’s electric car maker, decided that this was an area of the automobile market that could use some help. So in late 2017, he launched the Rivian Electric and Plug-In Hybrid Truck and subsequently his Series R Electric car, the R1H.
In the early days of both products, there was no precise business plan for getting these tech-based alternatives to the gas-powered vehicle to market. But by the summer of 2017, Rivian had raised $115m in funding, with valuations of the Series R Cars and its Electric Truck both exceeding $1bn. Since then, Rivian has received hundreds of thousands of pre-orders, and their launch, estimated for this summer, is certain to be attended by some very jubilant celebrating.
As the company sees it, the Electric Truck market has some huge potential for growth, given that it is projected to grow by 50 per cent a year until 2025. Rivian’s initial customers will not necessarily be regular drivers, but truck drivers in the two main markets: regional and long haul. The trucks will be officially unveiled in January this year, when the company reveals a photo of one of the vehicles.
While Rivian is not alone in the electric commercial vehicle market, it has unique advantages. One of its key selling points is the fact that the R1H (and the Electric Truck that will follow) will have an electric motor based on a traditional turbo-charged or direct-injected engine – a technology that has already proved itself to be perfectly capable of powering passenger cars. The second great differentiator is the company’s TruStar technology, which offers a software interface that will make it very easy for the truck owner to control the vehicle’s charging stations.
While Rivian hasn’t stated how much the trucks will cost, it did announce its first major breakthrough: the process of using unconventional tires to drive the truck. Each of the 265,000 calories of fuel that the trucks will save each year, because they won’t be refueling via gas, is effectively being offset by the weight reduction of using alternatives such as aerodynamic tires.
While neither the electric truck nor the Electric Car will be cheap, it’s likely that Rivian will be able to offer them at or near the price of traditional internal combustion-powered vehicles in the same markets that they will eventually be deployed. In any case, their electrification capabilities means that it won’t be as necessary to charge them in the hotel or hotel conference rooms where many interstate trucking routes come to rest.
Rivian’s cash-and-equity fundraising is typically done early in a new venture, for example through venture capital and private equity firms. This funding, with well over a million investors from diverse sectors including corporations, cities, state governments, universities, government agencies, and individuals, is normally considered a sign of institutional confidence in a company. And that’s what happens here; Rivian’s large number of investors means that when a company closes its initial investment round, its success is rarely questioned.
Closing the aforementioned funds in 2017 must have been an enormous challenge, given that Rivian is now branching out into the second-generation battery-electric vehicle market. This is an area that requires a long commitment and research into developing products and a supply chain that meets specific customer requirements. You only need to look at the recent appearance of Tesla in the market for long-range electric vehicles and the giant amounts of investment that it has made to see that the auto industry is moving in this direction rapidly.
With the company prepping its first two models, people are wondering how many investors and where they stand on its much-awaited third-generation model – which is yet to reach the development stage.
Those who believe that Rivian can successfully raise funds to meet this ambitious production plan will not need to look far for proof. Rivian’s decision to start building this vehicle using a prototype product design that will keep costs down, whilst improving efficiency, is an excellent example of a sound innovation model at work.
When Rivian enters the market, customers will reap the benefits of the many innovations that have