( Reuters ) – Amazon.com said on Friday it would lead to a $ 700 million investment in the U.S. electric pickup truck startup Rivian Automotive, in the e-commerce giant's biggest bet on technologies with the potential to reshape the automotive sector.
The deal represents a major endorsement of Rivian's electric vehicle technology by the world's largest online retailer. Amazon is hoping that Rivian will assist in its development of delivery vehicles that will strengthen its logistics network, according to a person familiar with the matter who has not been asked to discuss the confidential strategy
Reuters reported on Tuesday that Amazon and General Motors were in talks to invest in Rivian.
The Rivian could ultimately be valued at between $ 3 billion and $ 4 billion, one of the sources said in a statement. .
The Rivian deal comes as its much bigger electric car manufacturing rival, Tesla, struggling to stabilize production and deliver consistent profits as it ramps up its Model 3 sedan, with pricing ultimately aimed at giving it mass market appeal. Tesla Chief Executive Elon Musk told investors in August that an electric pickup is "probably my personal favorite for the next product" from the company. But he has only spoken about a potential launch, saying that it would happen "right after" Tesla's Model Y, which the company has targeted to start production in 2020.
Rivian unveiled its electric R1
Amazon CEO Jeff Bezos personally reached out to Rivian founder and CEO of R.J. Scaringe last summer to express interest in an investment, the source said. Since then, Amazon has stepped up its investment in the car sector, participating in a $ 530 million funding round announced last week in Aurora Innovation's self-driving car
Amazon is looking for deals that can speed up the buyers' doorsteps regardless of spikes in consumer demand or shortages of delivery personnel. Last year, Mercedes said Amazon had become the largest customer of its Sprinter vans, securing 20,000 vehicles for delivery contractors.
Amazon has also sought to win customers inside the car as well. Working with BMW AG, Ford Motor, and Toyota Motor, Amazon has enabled its Alexa virtual assistant to be installed in new models so drivers can dictate what music they want to hear and what tasks they want to perform, hands-free  Rivian aspires to be the first to produce a mass market electric pickup. It aims to begin selling its R1T by the end of 2020.
Scaringe has described the Rivian vehicle's platform as a skateboard that packs the drive units, battery pack, suspension system, brakes and cooling system all below wheel height to allow for more
He also said the company plans to partner with outside firms to develop advanced self-driving technology instead of trying to do it alone
Rivian's existing financial backers include Saudi car distributor Abdul Latif Jameel, Sumitomo of the Americas, and Standard Chartered Bank
Some existing shareholders participated in the funding round, Rivian said, stating that it will remain an independent company. Funding Daily : Get the latest news in your inbox every weekday