General Motors and Amazon are reportedly in talks to invest in Detroit startup Rivian Automotive and that indicates a massive shift in the "next and potentially imminent" electric vehicle market of pickup trucks, Morgan Stanley said on Wednesday.
"The highly lucrative and US-dominated pickup truck market" is "an important area of investor focus" due to the "culmination of battery cost reduction, architecture, duty cycle, and price point," Morgan Stanley analyst Adam Jonas said. Jonas earned a wide following on Wall Street due to his early calls on Tesla and the rise of electric vehicles.
Morgan Stanley featured Rivian earlier this week as the "next serious competition" for Tesla. The startup's "clean sheet" approach could make it "the next Tesla," Jonas said.
"We have focused considerable research effort on the theme of electric pickup trucks in recent days," Jonas said. Rivian emerged as the firm's top pick to challenge Tesla in the coming years, due to Rivian's "access to talent & capital focused on the fastest growing segments of pickup trucks & SUVs," he said.
The Amazon and GM deal would value Rivian between $1 billion and $2 billion, according to Reuters on Tuesday.
Morgan Stanley believes Amazon is seizing the opportunity to use its own technology "to shape electric delivery vehicles to support its own logistics efforts," the firm said.
"Amazon has spent the last few years building out and expanding its logistics network and recently invested in autonomous driving startup Aurora," Jonas said.
This story is developing. Please check back for updates.
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