What Is Rivian? How the EV Maker Makes Money

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Rivian Automotive is an American electric vehicle maker, founded in 2009 by Robert “R.J.” Scaringe, that designs and sells battery-electric pickup trucks, SUVs and commercial delivery vans. It makes money mainly by selling those vehicles, most of them directly to customers rather than through franchised dealers. A second, smaller revenue stream comes from software, services and related deals built around its vehicle technology. Rivian is headquartered in California, builds its vehicles in Normal, Illinois, and has traded on the Nasdaq under the ticker RIVN since its November 2021 IPO.

History

Scaringe founded the company in 2009 under the name Mainstream Motors. After a period as Avera Motors, it settled on Rivian in 2011. The name comes from the Indian River area on Florida’s east coast, where Scaringe spent time growing up. Rivian is an American company. It is not Chinese-owned, and it was not created as a subsidiary of another automaker.

For most of its first decade, Rivian developed its technology quietly and sold no vehicles. It was based for years in Plymouth, Michigan, near the traditional auto industry, before moving its headquarters to Irvine, California. In 2017 it bought a former Mitsubishi assembly plant in Normal, Illinois, which became its main factory.

Rivian unveiled the R1T and R1S in late 2018, around the time Amazon founder Jeff Bezos visited the Plymouth headquarters and met Scaringe. In 2019, money arrived from several large investors:

• Amazon led a major funding round.
• Ford took a stake, largely to gain access to Rivian’s “skateboard” platform. The platform puts the battery pack and drive components in a flat chassis, with a separate electric motor available for each wheel. Ford was then planning sharp increases in its own EV spending.
• T. Rowe Price, the fund manager, joined as another major backer.

By the time of the IPO filing, Rivian had raised at least $10.5 billion since 2019.

Hiring grew alongside the funding. Between 2018 and 2019, Rivian more than doubled its workforce to about 750 people. Dozens of the new hires came from Ford, Tesla and McLaren Automotive, and roughly 50 came from the struggling startup Faraday Future. Mike Bell, a longtime Apple executive involved in the iPhone launch, became Rivian’s first chief technology officer. Jeff Hammoud, formerly Jeep’s head of design, took the same role at Rivian. By June 30, 2021, headcount had reached 6,274 across the U.S., Canada and Europe, a large share of it engineering and technology staff.

In 2019, Rivian targeted 2021 as its first full production year, with a goal of 20,000 to 40,000 vehicles. R1T deliveries began in the fall of 2021, making Rivian one of the first companies to put an electric pickup into customers’ hands.

The 2021 IPO

Rivian filed confidentially for an IPO in August 2021. Early reports put its potential valuation near $80 billion, and November reports cited a target of $53 billion to $60-plus billion. The amended registration statement offered 135 million shares at $57 to $62, plus an underwriter option on another 20.25 million shares. At the top of the range, with the option exercised, that would have raised about $9.6 billion. Cornerstone investors, including Amazon and T. Rowe Price, indicated interest in a combined $5 billion of shares.

Demand ran ahead of those terms. The shares were ultimately priced at $78, above the filed range, and began trading on the Nasdaq on November 10, 2021. It was one of the largest U.S. IPOs in years. Rivian went public with only a small number of vehicles delivered, so investors were valuing its expected future production far more than its existing sales.

Who Is R.J. Scaringe?

Scaringe rebuilt vintage Porsches as a teenager and decided around age 18 that he wanted to start a car company. During his doctorate at MIT, he worked at the Sloan Automotive Laboratory alongside engineers from major automakers. He has said that concern about climate change and air pollution shaped his choice. In his view, building a company himself was the highest-impact path available to him.

He is also an outdoorsman and mountain biker, and that shows in the product. Scaringe has argued against what he called “untruths” about electric vehicles: that a truck can’t be electric, that an EV can’t go off road, get dirty or tow, and that truck buyers don’t care about the environment. Rivian designed its vehicles to ford about 3 feet of standing water. It also gave them a hardened undercarriage that protects the battery pack from rocks and debris.

Some industry analysts called Rivian’s trucks lifestyle products, capable but aimed at recreation rather than work-site use. Its consumer vehicles compete for buyers of premium SUVs and adventure vehicles more than for fleet buyers of basic work pickups.

On management style, Scaringe has said that putting the right team together is the core of the business. Unlike some EV peers, he set cautious production targets rather than bold ones.

What Rivian Makes

Rivian’s lineup has three main lines.

• R1T: an electric pickup with a shorter bed than Ford’s F-150. It was Rivian’s first delivered model.
• R1S: a three-row SUV whose boxy shape has drawn comparisons to the Range Rover. It competes most directly with Tesla’s Model X. Before launch, Rivian projected a range of 240 to 410 miles depending on battery pack, compared with published figures of 237 to 295 miles for the Model X at that time. Its roofline does not slope like the Model X’s, which gives the third row more room.
• Commercial delivery van: built first for Amazon, which in September 2019 announced an order for 100,000 Rivian vans as part of its Climate Pledge. Rivian later began offering commercial vans to other fleet buyers.

Pre-launch pricing guidance put both R1 models between about $70,000 and $90,000 for fully loaded versions. Before deliveries began, Rivian collected tens of thousands of reservations, each with a $1,000 deposit. These figures describe the launch period. Current trims and prices have changed since then.

Rivian has also unveiled a smaller, lower-priced model, the R2. The company aims to reach buyers beyond the premium segment where the R1 sits.

Business Model

Rivian designs vehicles, builds them in its own plant and sells them, but it differs from legacy automakers in two ways.

First, it sells directly to consumers. Buyers order online or through Rivian-owned locations instead of through independent franchised dealers. Rivian keeps the full retail price, and it controls the customer relationship, pricing and service. In exchange, it carries the cost of sales, delivery and service infrastructure itself rather than sharing it with dealers.

Second, it treats software as part of the product. Rivian vehicles receive over-the-air updates, and the company develops its own vehicle electronics and software. That in-house technology can be licensed or shared with other companies, which creates revenue beyond selling cars.

Revenue Segments

Rivian reports its revenue in two broad segments.

Automotive. This segment is the bulk of revenue. It covers sales of the R1T, R1S and commercial vans to consumers and fleets. It also includes regulatory credit sales. In markets with zero-emission vehicle rules, manufacturers that sell only EVs earn credits, which they can sell to automakers that need them for compliance. Amazon’s van program sits here too and gives Rivian a large repeat buyer, though one customer’s ordering pace can also swing results.

Software and services. This segment includes vehicle repair and maintenance, used-vehicle sales, charging, and other services connected to the vehicles. It also includes revenue from technology arrangements with other automakers. The largest of these is Rivian’s 2024 agreement with Volkswagen Group, which created a joint venture to develop electrical architecture and software using Rivian’s technology. Under that agreement, Volkswagen committed to invest in Rivian in stages tied to milestones.

Why profitability has been hard

Building a car company from scratch requires spending on factories, tooling, battery supply, engineering and service networks long before sales cover those costs. One analyst called the capital needs “enormous and ceaseless,” and Ford’s CEO at the time named manufacturing as Rivian’s biggest challenge. In its early production years, Rivian spent more to build each vehicle than it received for it. It has reported large annual net losses since its IPO and has relied on cash from investors and partners to fund operations and expansion.

Rivian continues to build and deliver vehicles. Whether it reaches sustained profitability depends on how efficiently it ramps production, cuts costs per vehicle and sells lower-priced models like the R2 in volume.

Major Shareholders

Before the IPO, voting power was split as follows:

Note: Ownership has shifted since the 2021 offering through the IPO itself, later share issuance and investor sales. Ford ended plans to co-develop a vehicle with Rivian in 2021 and later sold much of its stake, and Volkswagen became a significant investor through the 2024 partnership.

Rivian is most often measured against Tesla, which built more than 250,000 cars in 2018, a sign that the market Rivian is chasing could be large.

The Bottom Line

Rivian matters most to investors and car buyers weighing a young automaker against established rivals. It has real products, backing from Amazon and Volkswagen, and a direct sales model, but it has reported large net losses since its 2021 IPO. Its path to profit depends on ramping production efficiently, cutting the cost of each vehicle and selling lower-priced models like the R2 in volume.