Tesla rival might set up EV plant in Hungary

The site likely would first produce a delivery van for Amazon and soon after build Rivian models for consumers, people familiar with the matter told the news agency on condition of anonymity.

While no site has been selected yet, several countries are under consideration, including the U.K., Germany and Hungary, they added.

Rivian has hired the commercial real estate services firm JLL for the search, and it hopes to start van production as soon as next year, some of the people said. It also has solicited pitches from real-estate advisers for retail space in Europe where it will exhibit its vehicles. 

Rivian, which has raised more than USD 8 billion to date from high-profile companies and investors including Amazon, Ford Motor Co., T. Rowe Price, and BlackRock, would start deliveries of electric deliver vans already next year. The cause of the hurry is probably that in 2019 Amazon ordered 100,000 such vehicles from Rivian, and it expects 10% of them to be on the roads by 2022. The rest of the order is due by the end of the decade. Production of the vans is expected to start at Rivian’s plant in Normal, Illinois, by the fourth quarter.

Representatives for Rivian, Amazon and JLL declined to comment.

Rivian has huge plans, models line up

Rivian is seen as a potential automotive disruptor akin to Tesla Inc., the world's largest producer of purely battery-powered vehicles. It is to start manufacturing a pickup model in June, followed by an SUV in August. The R1T pickup model is to start at USD 67,000, with 300+ miles of range, accelerating from 0-60 mph in only three seconds, and a top speed of 125 miles per hour. It will come with three battery options. The smallest will have a 240-mile range and the strongest a 400-mile range. Deliveries could start in June this year. The next will be the R1S SUV, followed by several smaller models, targeting the Chinese and European markets. 

Rivian may make its stock exchange debut soon

Bloomberg reported on Wednesday that Rivian is looking to go public as soon as September at a valuation of about $50 billion and perhaps more, according to people familiar with the matter.

Rivian has raised more than USD 8 billion to date from investors who expect its battery-electric pickup and SUV to perform well in the U.S. market. At a USD 50 billion valuation, it would likely be one of the biggest IPOs of the year and one of the most noteworthy EV listings since Tesla’s 2010 offering.

The startup was valued at $27.6 billion in a funding round in January, Bloomberg News reported.

Although Bloomberg did not mention it, we need to highlight that the UK/EU Free Trade Agreement recently signed between the EU and the UK greatly reduces chances that Rivian will pick the UK as the location of its new plant.

The agreement urged and much-awaited by the entire automotive industry for a long time sets many conditions that could make any EV maker hesitant about manufacturing in the UK. The deal stipulates:

In the case of vehicles with internal combustion engine, at least 55% of the finished product needs to have local or EU origin. The required proportion in the case of alternative fuel vehicles is 40%.

Another key requirement is that until 2023, up to 70% of the cells used in purely electric vehicles may be of foreign origin. The requirement in the case of plug-in hybrid cars is 60%.

The rule is even tougher for 2024-2026, when 50% of cells must have UK/EU content and 55% of batteries in plug-in hybrids must have UK/EU content.

The aforementioned clearly shows that the UK/EU Free Trade Agreement set several rules that could overall lead to higher costs for the producers. And those that fail to meet these rules will be forced to pay a customs tariff if they want to sell their products in the EU.

Even if a carmaker meets the above requirements, it will still face major administrative burdens and a constant hassle of customs procedures. These could also keep Rivian from choosing the UK as the location of its new plant.

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