Apple Should Consider Buying Rivian to Compete in the EV Market, Says Future Fund Managing Partner Gary Black
In a recent post on X, Future Fund Managing Partner Gary Black suggested that tech giant Apple Inc (AAPL) should consider acquiring California-based EV startup Rivian Automotive Inc (RIVN). Black believes that Apple needs to take this step as Chinese smartphone makers are quickly overtaking the company in the production of electric cars.
Black’s recommendation comes at a time when Chinese smartphone maker Xiaomi has just launched its first EV, the SU7 sedan, and Huawei has showcased its Aito M9 SUV, developed in collaboration with carmaker Seres. These developments highlight the fierce competition Apple faces in the EV market, especially from Chinese manufacturers.
Rumors of Apple’s plans to manufacture a car have been circulating since the mid-2010s, but the company has yet to confirm or reveal any concrete information about its intentions in the EV industry. This lack of clarity has allowed competitors to gain an advantage and accelerate their EV production.
Black suggests that Apple should attempt to acquire Rivian, which currently has an enterprise value of $17.5 billion. However, he acknowledges that Rivian might not be willing to sell, especially considering that online shopping giant Amazon.com Inc (AMZN) still holds a 17% stake in the company.
Rivian has made significant strides in the EV market, with 15,564 vehicle deliveries in the third quarter, a number close to Tesla’s 15,985 Model S and X deliveries worldwide. The company expects to produce 54,000 vehicles for the entire year, highlighting its potential for growth and success in the industry.
In terms of financial performance, Rivian reported third-quarter revenue of $1.337 billion, surpassing analyst estimates. The company’s market cap currently stands at $22.47 billion. Black predicts that Rivian will become gross margin positive by the last quarter of 2024 and achieve EBITDA positivity by 2026.
While Black’s suggestion for Apple to acquire Rivian is certainly compelling, it remains to be seen whether Apple will take such a step. The EV market is highly competitive, and Apple will need to make strategic moves to establish a strong presence and compete effectively with both traditional automakers and emerging players.
As the EV market continues to evolve and expand, it will be crucial for Apple to make decisive moves to secure its position and capitalize on the growing demand for electric vehicles. Acquiring Rivian could provide Apple with the necessary technology, expertise, and production capabilities to compete with its Chinese rivals and establish itself as a significant player in the EV industry.
In conclusion, the recommendation for Apple to acquire Rivian comes at a crucial time for the tech giant. By venturing into the EV market and acquiring Rivian’s expertise and capabilities, Apple could position itself as a formidable competitor and regain its lost ground in the rapidly expanding electric vehicle industry.
