Rivian, the company that has developed an electric medium-duty truck, raising hundreds of millions of dollars in venture capital, has called it quits, ending over three years of trying to commercialize the vehicle in order to allow for further development.
An email sent to the company sent over the weekend revealed that Rivian “will no longer be actively developing the electric medium-duty truck it was working on”, however, “we will continue to work on autonomous capability.”
The news immediately sent shares soaring $16.52, or 167%, to $37.13 in Thursday trading. Investors apparently weren’t sure if Rivian would be able to make its investments pay off.
The electric truck, based on the Rivian EQ, was designed to sell for less than $100,000. Rivian also has a full-size pickup truck design and has also discussed a retrofitted long-haul truck with the same EV focus. But the electric truck won’t be the company’s primary product. The electric medium-duty truck could be the company’s flagship vehicle, but it would be by no means its only one.
Electric trucks have not caught on with consumers the way that hybrid vehicles have. Auto makers also are not in love with electric powertrains, especially those that use lithium-ion batteries, which are expensive to produce.
Electric trucks can be more efficient to run because drivers can unplug their electric engines when they move off the highway and recharge the batteries.
Electric manufacturers have typically focused on highway trucks, like tractor trailers and buses, since they have been less susceptible to battery failures. State highway authorities also make a variety of rules and regulations around electric trucks.
But Rivian made its truck available for drivers in 45 US states by the end of 2018.
A Rivian model at a dealer, in Cleveland. Photograph: Scott Nusbaum for Rivian
Electric technology was once derided as a niche product that would not be cost-competitive with gas-powered vehicles. Rivian was an exception that showed electric trucks could compete on a cost basis and still give customers performance, if they were able to change their behavior to be more electric-savvy.
Investors also have seen how electric vehicles can work in other industries – in fact, some of the auto companies that have launched electric vehicles this year already are looking to build electric trucks. Tesla, for example, has made lithium-ion batteries part of its electric vehicles for over a decade, and the company has won endorsement from the trucking industry for its design.
The electric truck still has issues. Rivian says it is working on the “utility of the truck” and “over-the-air software updates to deliver high levels of autonomy and portability”. If the company gets good consumer interest in the truck, it could drive costs down further. In the meantime, it can be said that the company is at least helping to usher in a new era of electrification in North America’s transportation sector.