What is Rivian and why did it drag down Amazon and Ford earnings?

April 30, 2022 Off By [email protected]_84

Both Amazon and Ford claimed quarterly earnings losses this week, citing their investments in Rivian Automotive.

Amazon on Thursday reported a unusual quarterly loss of $3.84 billion, owing entirely to a $7.6 billion reduction in worth of its stock expenditure in Rivian Automotive. Similar with Ford, which said it missing $5.5 billion on its Rivian holdings in the quarter, resulting in it to report an total reduction of $3.1 billion.

Why did a publicly obscure startup lead to complications for this kind of U.S. enterprise giants?

What is Rivian?

Rivian Automotive is an electrical truck manufacturer that owns a previous Mitsubishi plant in Ordinary, Illinois.

It was established by RJ Scaringe, who gained his Ph.D. from the Massachusetts Institute of Technology in 2009. In 2011, Scaringe scrapped ideas to establish a coupe, noting the auto industry’s change to pickups.

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Why did Ford and Amazon commit?

Rivian’s assure, and Scaringe’s eyesight and connections, have constantly captivated big investors. Scaringe’s MIT connections joined him with the Jameel loved ones of Saudi Arabia, which, alongside with other traders, assisted the enterprise raise $450 million.  

After a splashy truck unveiling that even attracted singer Rihanna in conjunction with the L.A. Car Display in November 2018, Amazon introduced in February 2019 that it would lead a $700 million investment in the enterprise. That April, Ford reported it was investing $500 million.