Rivian Corporation began as a scrappy startup in 2009. Volkswagen has spent decades failing to understand American car buyers. Now they’re betting $5.86 billion that Rocky Road and Licorice actually do mix.
The electric vehicle maker, started as an enthusiast-run firm by an entrepreneur, R.J. Scaringe, with money from family and friends plus angel investors. This backing allowed him to pivot from small sports cars to adventure-oriented EVs.
He attracted serious money in 2017–2018 including Sumitomo Corporation and a Saudi auto distributor.
Then Amazon led a $700 million round of funding in 2020, with Rivian promising to produce 100,000 electric delivery vans for them.
In 2021, they raised $13.7 billion in an IPO and had a valuation of $86 billion.
Then came the hard part of manufacturing vehicles, selling them, and making money, all out of their plant in Normal, Illinois.
Amazon seems to be happy with the delivery vans they have received and Rivian appears to be hitting its deadlines. AT&T is nibbling at becoming another major customer.
But Rivian wants to make SUVs and light trucks to sell to real people, and they do have a fan who has money and would like to invest in the idea. The fan likes their SUVs and the Miami Vice-inspired paint job.
Volkswagen to the rescue.
Cross rocky road with licorice.
VW does not get Americans, and it is mutual. Their latest fiasco is a new electric VW Microbus named the ID. Buzz. It made its debut in Huntington Beach, California in 2023. A lot of the old fans showed up. It all sounded like a brilliant idea.
Unfortunately it took two more years to get the Buzz into the showrooms, primarily because VW gave it to their commercial vehicle division to build it. It’s not a bus, but nobody in the personal vehicle companies, Audi, Porsche, VW would lend a wrench.
VW’s previous adventure in the US was in 2015 when they were found guilty of falsifying emissions numbers on their diesels. The company took billions in losses and all but killed their credibility in America.
The ID. Buzz has been a $70,000 flop. It has three rows of seats, but only two seat belts in the second and third row. Only two cup holders, too. The mileage range is terrible as well, just 234 miles under ideal California conditions. Don’t bring it to Chicago.
VW has made a deal now with Rivian to put up $5.86 billion if the American company can help it develop useful software for building vehicles and help it to be more entrepreneurial and cool. The joint office is in Palo Alto. Good luck recruiting.
At least VW realizes they need help. So far the ID. Buzz has sold less than 5000 units.
Rivian better make sure Amazon is happy. The EV tax credits which have helped keep the firm afloat expire September 30.
Question: What advice do you have for VW and Rivian to make a vehicle people will buy?
6 Comments
Stick with gasoline powered vehicles, the American lifestyle is not suited for EV transportation. We want the freedom to drive 400 to 500 miles and refuel in 5 minutes and be on our way.
The EV technology and infrastructure is not there yet.
Sell Amazon type vans as RVs and let ingenious buyers play with them like people did with the VW microbus 60 years ago. People have been waiting for an electric RV
Lloyd, with all due respect, I take it you have never owned an RV and have not lived in the west. More weight equals less range so an electric RV with the current technology just isn’t practical. We have an upcoming RV trip from Utah through Nevada, California, Oregon, Washington, Idaho, and Montana. It would be impossible to find places to charge an RV throughout this trip and we would not want to waste our vacation time sitting at charging station after charging station. Maybe this will be a thing someday but for now it’s just not practical.
It’s true. An electric RV just doesn’t compute right now. At least it’s counter intuitive.
But, that said. If you were traveling across the country and wanted to save money on fuel, an Electric RV does make sense.
People would laugh 40 years ago at the idea of an iphone. They couldn’t comprehend Google.
20 years ago people weren’t fathoming ChatGPT.
So is an electric charging infrastructure that crazy?
Is it crazier than the idea of a transcontinental railroad in the 19th century?
I was thinking short day trips or long stays in one place. Appreciate the education.
This is the sort of challenge that could be promoted—in university engineering programs across the US, in high schools, and to auto geeks everywhere and don’t forget AI. There is a solution: it just hasn’t been imagined yet, but it may involve using an energy source that doesn’t have to be plugged in… and successful products are also helped along by engaging marketing, too, which this quest would be.