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Rivian gets $350 million investment from Cox Enterprises

3784 Views 12 Replies 5 Participants Last post by R99, Feb 12, 2020

R99

Discussion Starter · Sep 10, 2019

If the investments from Ford and Amazon weren't enough, Rivian has apparently secured $350 million from Cox Enterprises, bringing Rivian’s valuation to about $3.5 billion.

Cox Enterprises, which owns automotive businesses like Autotrader, Kelley Blue Book, Dealertrack, and Dealer.com, will help Rivian with maintenance and digital sales.

Based on the article from the Wall Street Journal, Rivian plans to sell the R1S and R1T without a dealer network and Cox will help them with maintenance and logistics.

Mr. Scaringe said Rivian plans to sell its trucks directly to consumers, without a network of dealerships. It may lean on Cox or others for expertise in areas like vehicle maintenance and logistics, he said.

Cox’s Manheim division operates a large auction network where dealers buy and sell used cars. Working with an upstart like Rivian will give the company a better view into future automotive trends, said Sandy Schwartz, president of Cox Automotive.

“We provide services from the time [cars] come off the assembly line to the time they go to the junkyard,” Mr. Schwartz said in an interview. “We need to understand what that’s going to look like five, 10, 15 years from now.”

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JimmyEV

· #2 · Sep 11, 2019

A $3.5 billion valuation is staggering considering that Rivian hasn't officially unveiled the R1S and R1T. I wonder if that was the same valuation when Ford and Amazon invested into the company. Because based on this investment Cox owns 10%.

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R99

Discussion Starter · #3 · Sep 12, 2019

JimmyEV said:
A $3.5 billion valuation is staggering considering that Rivian hasn't officially unveiled the R1S and R1T. I wonder if that was the same valuation when Ford and Amazon invested into the company. Because based on this investment Cox owns 10%.

That's a really good question, because at some point that Rivian board room is going to be very crowded.

If we use the $3.5 billion valuation as the benchmark then that means Amazon's $700 million bought them 20% and Ford's $500 million bought them around 14% as well.

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JimmyEV

· #4 · Sep 14, 2019

It's crazy how much money Rivian has been able to secure from its investors. Thank goodness it's with some of the most strategic partners they could ask for.

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EyeOnRivian

· #5 · Sep 22, 2019

One area so far I have not seen any mention of is trade-ins, even before the Cox Enterprises investment but especially now. Does anybody see Cox Enterprises as a Rivian partner to help facilitate with the processing of trade-ins?

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eHauler

· #6 · Sep 23, 2019

EyeOnRivian said:
One area so far I have not seen any mention of is trade-ins, even before the Cox Enterprises investment but especially now. Does anybody see Cox Enterprises as a Rivian partner to help facilitate with the processing of trade-ins?

It would be in Rivian's best interests to push for that, few automakers have (if any) from what I seen

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JimmyEV

· #7 · Sep 23, 2019

EyeOnRivian said:
One area so far I have not seen any mention of is trade-ins, even before the Cox Enterprises investment but especially now. Does anybody see Cox Enterprises as a Rivian partner to help facilitate with the processing of trade-ins?

I would have to think Cox Enterprises will be helping Rivian with that given their resources. But I think the reason we haven't heard anything about that is because Rivian doesn't want to focus on trade-ins before their vehicles have been delivered haha.

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EyeOnRivian

· #8 · Sep 25, 2019

JimmyEV said:
I would have to think Cox Enterprises will be helping Rivian with that given their resources. But I think the reason we haven't heard anything about that is because Rivian doesn't want to focus on trade-ins before their vehicles have been delivered haha.

Yea, quite possibly.

Though I can only imagine given the price point of these EVs people will be looking to use whatever financial resources they have to help fund their purchase and a trade-in is a big and obvious source of cash to reduce that initial out-of-pocket expense. Perhaps it won't be available with the initial launch but I can't imagine Rivian not offering something shortly there after. IMO that could be a large amount of lost sales, something a startup can't afford.

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R99

Discussion Starter · #9 · Sep 25, 2019

EyeOnRivian said:
Yea, quite possibly. Though I can only imagine given the price point of these EVs people will be looking to use whatever financial resources they have to help fund their purchase and a trade-in is a big and obvious source of cash to reduce that initial out-of-pocket expense. Perhaps it won't be available with the initial launch but I can't imagine Rivian not offering something shortly there after. IMO that could be a large amount of lost sales, something a startup can't afford.

I agree, they definitely should have something in place to help customers out instead of people selling their cars privately. Something similar to what Tesla offers.

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wbdamron

· #10 · Sep 26, 2019

In many states, you don’t get a sales tax credit if you don’t trade in to a dealer. So if you purchase a Rivian for $90K, in Kansas, you will have an $8,500 +/- sales tax bite. But if you could get say, a $35K credit for trading in a 2016 Denali, the sales tax would only be assessed against a $55K purchase... saving around $3,000 or so.

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EyeOnRivian

· #11 · Sep 27, 2019

wbdamron said:
n many states, you don’t get a sales tax credit if you don’t trade in to a dealer.

Hmm, yes, I've heard of that but it's been a while since my last trade-in (10+yrs). That brings up an interesting question when there are no dealerships like Tesla (and most likely with Rivian). Did Tesla purchasers miss out on this tax credit or were there other provisions to get the tax credit? (Any Tesla owners out there that did a trade-in that could share their experience on this?)

BTW, according to this website it states:
"The only states that DO NOT currently give a tax credit as of February 2019 are:

California
District of Columbia
Hawaii
Kentucky
Michigan
Montana
Virginia

If you live in one of these states, you have more incentive to sell your car to a private party."

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JimmyEV

· #12 · Feb 10, 2020

Forbes did a profile article on RJ Scaringe and in it they elaborated a bit more about what Cox's role will be with Rivian.

There's 2 parts:
1) You will likely be able to take your R1S/R1T to a Cox service center like Pivet

But it’s the Cox partnership that could prove the most troubling for Musk. While Tesla has more than 100 service centers in 30 states, Cox handled more than 55 million service appointments in 2019 at its sprawling network of commercial and dealer partner service centers across the United States. If something goes wrong with an R1T or R1S, the idea, presumably, is that a customer will be able to take the vehicle to a Cox service center like Pivet to have it repaired correctly and in a timely fashion, something that Tesla has struggled with since its inception.

2) Cox is looking to control the Rivian secondary market

Cox is also playing the long game with Rivian—as more vehicles come to market, it wants to control secondary sales. “My hope is with the skills that we have,” says Cox president Sandy Schwartz, “and with all the things that we’re learning, that we’ll be the chief wholesale remarketer for all Rivians someday.”

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R99

Discussion Starter · #13 · Feb 12, 2020

Assuming Cox is the main seller of used Rivians, I wonder how much, if at all, it will affect resale prices.

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