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Electric Truck Unicorn Rivian, Backed By Amazon And Ford, Lands $350 Million Investment From Cox

Rivian, an innovative truck startup planning to produce all-electric pickups and SUVs that’s backed by Ford Motor Co. and Amazon, said Cox Automotive is investing $350 million and may partner with it on future business operations.

Led by 36-year-old founder and CEO RJ Scaringe, Plymouth, Michigan-based Rivian has ginned up excitement in the auto industry with its plans to launch a line of long-range, rechargeable light trucks, including the R1T pickup and R1S SUV, built off a highly functional “skateboard” platform that integrates the battery pack, drive components and suspension system. Ford invested $500 million in April and Amazon led a $700 million round in February.

Cox, which owns an extensive range of businesses related to auto sales and services, including consumer information sites Kelley Blue Book and Autotrader, retailer data services Dealer.com and Dealertrack, and automotive auction business Manheim, will also explore ways to help Rivian with service operations, logistics and digital retailing.

Today In: Business

“We are building a Rivian ownership experience that matches the care and consideration that go into our vehicles,” Scaringe said in a statement. “Cox Automotive’s global footprint, service and logistics capabilities and retail technology platform make them a great partner for us.”

A Clark Kent look-alike with a Ph.D. in mechanical engineering from MIT, Scaringe has refined his ideas for electric vehicles over the past decade and could prove to be a major competitor to Tesla’s Elon Musk, who has his own plans for battery-powered trucks, ranging from a pickup to 18-wheel semis.

Rivian aims to begin production and sales of its first two models from late 2020, building them at the former Mitsubishi Motors Corp. assembly plant in Normal, Illinois, that it purchased in 2017 and is renovating. The company already has more than 1,000 employees and wants to begin selling its electric vehicles internationally from 2021.

Both the R1T and R1S are to have electric range of up to 400 miles per charge–well more than any of Tesla’s current EVs–and they are priced from $68,000 and $72,500, respectively.

Rivian’s fundraising in the past year has been prodigious and totals at least $2 billion with Cox’s investment. Still, it declined to provide an estimate valuation or confirm what stake is owned by Scaringe. In addition to the funding from Ford and Amazon, it raised $450 million in an earlier round that included Saudi Arabia-based investment group Abdul Latif Jameel, Su­mi­tomo Corp. of Japan and London’s Standard Chartered Bank.

“We are excited by Rivian’s unique approach to building an electrified future and to be part of the positive impact its products will bring to our roads and the world around us,” said Sandy Schwartz, president of Cox Automotive. “This investment complements Cox Automotive’s own commitment to environmental change through our Cox Conserves efforts.”

Along with its equity stake and potential business operations, Cox Automotive will have a seat on Rivian’s board.

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From Los Angeles, the U.S. capital of cars and congestion, I try to make sense of technology-driven changes reshaping transportation, cities and how we get around. I’ve tracked global automakers, advanced vehicle tech and environmental policy for more than two decades, including 15 years at Bloomberg, and squeezed in stints in the financial and corporate worlds. What’s your story?

Source: Electric Truck Unicorn Rivian, Backed By Amazon And Ford, Lands $350 Million Investment From Cox

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America’s Real Economy: It Isn’t Booming – Peter Georgescu

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Ostensibly, for the past ten years, US economy has been recovering from the 2008 collapse. During the past few years, our comeback seems to have gained momentum. All the official indicators say we’re back in boom times, with a bull market, low unemployment and steady job growth. But there is an alternative set of data that depicts a different America, where the overlooked majority struggles from month to month.

The Nation recently published a stunning overview of the working poor and underpaid. One of the most powerful data points in the piece described how empty the decline in unemployment actually is: having a job doesn’t exempt anyone from poverty anymore. About 12% of Americans (43 million) are considered poor, and yet they are employed. They earn an individual income below $12,140 per year, and slightly more than that for a family of two. If you include housing and medical expenses in the calculation, it raises the percentage of Americans living in poverty to 14%. That’s 45 million people.

At that level of income, there’s almost no way to pay for food and shelter in any sizeable American city. That means people now can both be employed and homeless. Rajon Menon writes, for The Nation:

In America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families.

Fewer and fewer people have savings to weather time between jobs or an emergency expense. A third of the U.S. population has no savings and another third has saved less than $1,000. Two-thirds of American households, by this measure, are desperately scrambling to make ends meet from check to check. Nearly half the American population earns too little to live on comfortably:

One-third of all workers earn less than $12 an hour and 42% earn less than $15. That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.

Even in households that combine income from two wage-earners, it’s rarely enough to live on without anxieties about money. It takes an average of a little more than $100,000 per year now for a household to be able to live without anxieties about money.

Slow and steady inflation has eroded buying power over the past decade. According to The Nation, the minimum wage rose to $7.25 by 2009, but since then inflation has eroded 10% of its buying power. So this year, someone will have to work 41 additional days to make the equivalent of the 2009 minimum wage.

  • Healthcare costs are projected to go up 20% in the coming year.
  • Credit card debt has crested at a trillion dollars and is projected to increase at 4.7% by 2020.
  • Wages have been increasing by only 2.9% per year.
  • For the young, education debt has reached a record $1.52 trillion.

How long is this sustainable?

What’s genuinely astonishing to me is that the private sector doesn’t see the immense danger in all this—not simply the prospect of a collapse from enormous household debt loads, but the prospect of civil unrest after another huge correction like the one in 2008. Our current course is unsustainable. And for all the proposals for changes in public policy to ameliorate income inequality, only the private sector can get the nation on a better track by raising wages, increasing benefits and investing in new ventures and expanded markets.

There are numerous ways in which our wealthiest companies could help change the course of our economy. Here are some suggestions from Larry Thompson, former executive VP for PepsiCo, and his coauthors writing for Fortune magazine:

  • Get involved in early education for children of employees. Programs that start at birth can lift their earnings by up to 26%. At PNC Financial Services Group, their Grow Up Great program has served over 2 million children throughout the U.S., through grants to organizations that support early learning in math, science, and the arts.
  • Fund higher education for existing employees. In collaboration with Southern New Hampshire University, Anthem Insurance (ANTM, -0.06%) recently began making associate’s or bachelor’s degrees available at no cost for 50,000 eligible workers. Another company, FedEx, partners with nearly 20 higher education institutions including Western Governors University.
  • Businesses also should look to re-employ the long-term unemployed, Frontier Communications has hired more than 250 of the long-term unemployed in 2014 alone by eliminating most qualifications and simply observing how well applicants communicated.

These initiatives only scratch the surface, but they are exactly what all companies need to be thinking of doing. If every employer in America came up with even just one modest step—higher wages, regular profit sharing, tuition reimbursement—to help workers spend and save more, the nation would begin to right itself economically. It needs to happen now. We’re running out of time.

 

 

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