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Amazon places a big bet to reinforce its logistics network

According to Amazon, it would lead a $ 700 million investment in the US electric pickup truck Rivian Automotive LLC. In the biggest bet of the e-commerce giant on technologies with the potential to reshape the automotive sector.

The agreement represents an important endorsement of Rivian’s electric vehicle technology by the world’s largest online retailer.

Assistance in the development of delivery vehicles

Amazon expects Rivian to assist in the development of delivery vehicles that reinforce its logistics network, according to a person familiar with the issue who asked not to be identified to discuss the confidential strategy.

Reuters reported on Tuesday that Amazon and General Motors Co were in talks to invest in Rivian. GM’s talks with Rivian about an investment continue and any agreement will be announced at a later date, people familiar with the talks said on Friday.

Rivian could be valued between $ 3 billion and $ 4 billion, said one of the sources. The agreement with Rivian comes when its much larger rival in electric car manufacturing, Tesla Inc. Struggles to stabilize production and offer consistent profits as it increases its Model 3 sedan, with prices that ultimately aim to give it an attractive to the mass market.

Tesla Chief Executive Elon Musk told investors in August that an electrical harvest is probably my personal favorite for the next product of the company. But he has only talked in general about a possible launch, and said that it would happen just after the Tesla Model Y, that the company aims to start production in 2020.

Rivian presented his R1T electric truck and his R1S SUV for the first time at the Los Angeles Auto Show last November. But the company had aroused Amazon’s interest before, according to one of the sources.

The interest in the investment

Amazon CEO Jeff Bezos personally contacted Rivian founder and CEO RJ Scaringe last summer to express interest in an investment, the source said. Since then, Amazon has increased its investment in the automotive sector, participating in a $ 530 million financing round announced last week at the new self-service company Aurora Innovation Inc.

Amazon is looking for deals that can accelerate packages to buyer’s doors, regardless of the spikes in consumer demand or the shortage of delivery personnel. Last year, Mercedes said that Amazon had become the largest customer of its Sprinter trucks, securing 20,000 vehicles for delivery contractors.

Amazon has also sought to win customers within the car. Working with BMW AG, Ford Motor Co and Toyota Motor Corp, Amazon has allowed its virtual assistant Alexa to install new models so that drivers can dictate what music they want to listen to and what tasks they want to perform, with hands free.

An aspiration to be the first to produce an electric harvest in the mass market

Rivian aspires to be the first to produce an electric harvest in the mass market. He intends to start selling his R1T at the end of 2020.

Scaringe has described the Rivian vehicle platform as a skateboard that packs the handling units, the battery pack, the suspension system, the brakes and the cooling system. All below the height of the wheel to allow more space for storage and greater stability due to a lower center of gravity.

He has also said that the company plans to partner with outside firms to develop advanced self-driving technology, rather than trying to do it on their own.

Rivian’s existing financial backers include Saudi car dealer Abdul Latif Jameel Co, Sumitomo Corp of Americas and Standard Chartered Bank.

Some existing shareholders participated in the financing round, Rivian said, and insisted that it will remain an independent company.

Also published on Medium.

Published inE-commerce

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