Gary Black Advocates for Apple’s Rivian Acquisition to Keep Pace with Chinese Smartphone Car Manufacturers, Future Fund Managing Partner Proposes Strategic Move Amidst Rise of EVs from Tech Competitors
In a recent statement, Gary Black, Managing Partner at Future Fund, suggested that Apple Inc (AAPL) should consider acquiring the California-based electric vehicle (EV) startup Rivian Automotive Inc (RIVN) to counter the growing influence of Chinese smartphone manufacturers entering the automotive market.
The Proposal and Potential Hurdles
Black recommended that Apple should explore the acquisition of Rivian, valuing the EV startup at an enterprise value of $17.5 billion. However, he acknowledged the potential challenges, highlighting Rivian’s ties with Amazon, which currently holds a 17% stake in the company. This could pose a significant obstacle to any acquisition plans.
The Context: Chinese Smartphone Makers Enter the EV Arena
The suggestion comes in response to recent developments in the tech industry, where Chinese smartphone manufacturers, such as Xiaomi and Huawei, are expanding into the electric vehicle sector. Xiaomi introduced its SU7 sedan, and Huawei showcased its Aito M9 SUV, developed in collaboration with carmaker Seres. Black’s recommendation underlines the urgency for Apple to make strategic moves in the automotive space to maintain its competitive edge.
Apple’s History in the Auto Industry
Rumors surrounding Apple’s interest in manufacturing cars have circulated since the mid-2010s. Despite ongoing speculation, the company has not officially disclosed any plans related to the development or production of automobiles.
Rivian’s Performance and Potential
As of the end of the third quarter, Rivian has delivered 15,564 vehicles globally, closely trailing Tesla’s Model S and X vehicle deliveries by a mere 421 units. With an ambitious production target of 54,000 vehicles for the entire year, Rivian reported a third-quarter revenue of $1.337 billion. The company’s market cap stands at $22.47 billion.
Future Outlook for Rivian
Gary Black expressed optimism about Rivian’s future, anticipating the company to achieve gross margin positivity by the last quarter of 2024 and become EBITDA positive by 2026.
