Facing question about acquisition, Rivian's RJ Scaringe rattles off the benefits of being independent
Rivian founder and CEO RJ Scaringe said Friday there are advantages to building his business independently, rather than being acquired by another company.
Scaringe spoke Friday at Bernstein’s 39th annual Strategic Decisions Conference. He was asked whether Rivian was better off going it alone (staying an independent company) or being acquired by a well-capitalized owner. His response:
“The benefits of a clean sheet – in terms of distribution, technology stack, supply chain, brand – are quite significant. There’s also challenges with that, of having to build things yourself – building production capacity and know-how,” he said. “But there are implicit advantages of being able to design an auto business at its core around what the future state is. For example, we’re not going to build 4,000 physical retail locations to deliver volume. That's an antiquated way of having to deliver a couple million cars a year in a market. But that's a burdened legacy cost that traditional OEMs (original equipment manufacturers) have to deal with. That’s a really big challenge in the long-term, if you have this over-heavy, over-expensive go-to-market channel. That’s well-documented.
“We just don’t have that. So, we get to design a digital-first, digitally native transaction platform, and that extends into thinking about the customer model in a very different way, where there’s software features, there’s the ability to have the vehicles get better over time, those types of things,” Scaringe said.
Rivian is making its electric trucks, SUVs and vans in Normal, where it employs 7,500 people and is McLean County's second-largest employer. The company has attracted big investments from companies like Amazon and Ford, although it’s remained independent throughout its rollout and production ramp-up.
Rivian went public in 2021, and it’s share price has plummeted ever since. Bloomberg reported this week that Rivian may get pushed out of the Nasdaq 100 Index this month.
Rivian had about $12 billion in cash as of its last quarterly earnings call. It’ll need that money to build its second manufacturing plant in Georgia, where its next-generation R2 vehicles will be made starting in 2026.