General Motors (GM) and Amazon are in talks about investing in electric-vehicle-maker Rivian Automotive in a deal valuing the start-up at US$1 billion (S$1.36 billion) to US$2 billion, said people familiar with the matter.
The Plymouth, Michigan-based start-up is working on an electric pickup and sport utility vehicle (SUV), and debuted concept versions at the Los Angeles Auto Show in November.
Trucks and SUVs are gas-guzzling cash cows for Detroit car-makers. An investment in Rivian could help GM get an electric pickup to market faster and help ward off upstarts such as Tesla.
For Amazon, investing in Rivian would signal an ambition to shift a portion of the massive vehicle fleet that delivers its packages to zero-emission vehicles.
"Rivian is being cast in the same light as Tesla, a start-up that's outside the inner circle of the auto industry and that's appealing to GM," said Mr Jeff Schuster, senior vice-president of forecasting at researcher LMC Automotive.
"GM could clearly do an electric pickup itself - it has the technology and a strong base of pickup buyers. But they don't have Rivian's image and separation."
GM has dropped hints that a plug-in pickup could be a possibility. When asked at an investor conference last month whether the company will sell one, CEO Mary Barra replied to an analyst: "You'll have to stay tuned."
"We admire Rivian's contribution to a future of zero emissions and an all-electric future," GM spokesman Pat Morrissey said in a statement.
Representatives for Amazon and Rivian declined to comment.
Like Tesla, Rivian acquired a vehicle assembly plant for a bargain from an established car-maker. It bought a factory in Illinois for US$16 million from Mitsubishi Motors in early 2017.
Tesla builds its electric cars at a facility shuttered by Toyota, after GM pulled out of a joint manufacturing venture as part of its 2009 bankruptcy.
Rivian executives have said their R1T electric pickup will be able to reach 96kmh in three seconds and tow 4,990kg. Deliveries are expected to start next year.
Parcel delivery is an ideal use for electric cars, as the vehicles can begin and end trips at designated charging points and take anxiety over battery range out of the equation.
Amazon is expanding its delivery capabilities through a network of independent contractors. Some drive their own vehicles, guided by an Amazon smartphone app. Others lease fleets of vans and hire teams of drivers.
"This gives Amazon the ability to jump into the automotive space," Mr Schuster said. "They're probably thinking of delivery applications. And this gives them a safe entree."
Amazon last year announced a delivery service partner programme that encouraged entrepreneurs around the country to start their own businesses by hiring drivers and leasing vans to make deliveries.
The company helps by securing discounts on van leases, insurance and other expenses and offers a steady stream of business.
In just a few months, Amazon had more than 100 new businesses around the country making deliveries on its behalf and continues to recruit for the partners' programme.
The rapid growth of Amazon's e-commerce business has put pressure on the company to expand capacity and reduce its reliance on its delivery partners that include United Parcel Service, FedEx and the US Postal Service.
Betting on Rivian would be Amazon's second auto investment in short order.
The company was among the participants in a US$530-million funding round that self-driving start-up Aurora Innovation announced this month.
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