Following a tumultuous year in 2024, the electric vehicle (EV) market remains unstable in 2025. The current U.S. presidential administration’s indifference towards clean energy contributes to an uncertain future for the industry. Once hailed as a leading startup, Rivian (RIVN) finds itself grappling with a challenging economy and persistent hurdles as it attempts to keep pace with Tesla (TSLA). Although its electric trucks and SUVs have garnered a loyal fanbase, this popularity has not translated into substantial share growth.
According to James Ochoa from TheStreet, Rivian’s CEO RJ Scaringe recently attempted to emulate Elon Musk’s strategies to generate excitement for its new EV models among fans, but it may be an instance of too little, too late. Nevertheless, the company has clarified that its focus extends beyond just automobiles.
Rivian is embarking on an unexpected journey into a different transportation sector.
The company is launching a spin-off that won’t be creating large-scale EVs.
Rivian’s new venture is fraught with risks, including potential bankruptcies and delistings. In a market where Tesla reigns supreme, consistent adoption is critical for success among startups. Competing against a corporation with unparalleled resources and influence is a formidable challenge.
Rivian seems to be stepping up, however, or at least making significant efforts. The EV startup has disclosed plans to launch a spin-off named Also, focusing on the micro-mobility sector to manufacture small and lightweight electric vehicles.
Views among analysts regarding Rivian’s prospects in 2025 are mixed.
One surprising aspect of this development is Rivian’s focus on the micromobility sector, an industry known for its failures. A few years ago, American cities were cluttered with electric scooters from firms like Bird and Lime, accessible via mobile apps.
Nonetheless, this trend has proven short-lived, as the business model for this new transportation form has shown to be unsustainable. Many companies, including Bird—once the largest e-scooter provider in the U.S. with a valuation of $2.5 billion—have fallen to bankruptcy in December 2023.
The industry’s decline is exemplified by micromobility.com, formerly known as Helbiz, which was delisted from the Nasdaq in 2023 after failing to maintain a share price above $1.
Despite the complicated history of the market, Rivian expresses confidence in Also’s future. Eclipse Ventures shares this optimism, having recently invested $105 million into the startup.
Rivian’s Also was originally a covert project within Rivian to assess whether the company’s technology could be scaled down for smaller vehicles. Rivian has confirmed that this is indeed feasible, and while Also will function as an independent entity, it will maintain close ties to Rivian.
“Rivian possesses a minority stake, Scaringe will sit on its board, and Also will benefit from the automaker’s technology, retail presence, and economies of scale. Chris Yu, Rivian’s Vice President of Future Programs, will serve as its president,” as reported by TechCrunch.
Rivian is keeping its plans for the startup largely under wraps.
The outcome of Also will significantly impact the direction of the micromobility industry. Specifics about the vehicles being developed remain elusive, but reports indicate the team comprises former employees from Tesla, Uber, and Google.
Elon Musk neglected to address a critical question during a recent Tesla all-hands meeting.
What is known is that Also’s flagship vehicle is set to commence production next year, making it available to consumers in the U.S. and Europe. Additionally, the company intends to launch both commercial and consumer models in markets across Asia and Africa.
“To enable a full transition to electrified transportation, a diverse array of vehicle types and designs will be essential,” Scaringe declares. “I am greatly enthusiastic about the innovations being crafted by the Also team, which will underpin a variety of exciting micromobility products and help shape new categories.”
Moreover, Rivian’s CEO has disclosed that Also will unveil its initial vehicle designs at an event scheduled for 2025. Given the uncertainty surrounding the company’s plans and products, many are likely to be eager to see the designs when they are revealed.