Carvana has secured an option to invest in Slate Auto, an electric vehicle startup supported by Jeff Bezos. This move comes as Carvana seeks to broaden its market presence into new car sales.
Documents filed with Delaware's division of corporations indicate that Carvana was granted a warrant to purchase shares in Slate Auto, with the potential exercise date set for 2025. This aligns with Slate Auto's efforts to finalize a $650 million Series C funding round.
While details regarding the number of shares Carvana can acquire remain undisclosed, both companies have refrained from commenting on the specifics of the deal.
Expanding Sales Strategy
Carvana's interest in new car sales is evident as the retailer has reportedly acquired several Stellantis dealerships across the U.S. During a recent earnings call, CEO Ernie Garcia III hinted at future developments, urging analysts to “stay tuned.”
Slate Auto's Upcoming Offerings
Slate Auto is nearing the announcement of final pricing and will soon begin taking non-refundable preorders for its affordable electric vehicle, anticipated to be priced in the mid-$20,000 range. The company aims to deliver its first vehicles by the end of this year.
Direct Sales Model
Similar to companies like Tesla and Rivian, Slate Auto plans to bypass traditional dealerships, opting instead for direct sales to customers. Collaborating with Carvana could streamline the logistics of vehicle sales, enhancing Slate's visibility in the market.
Investor Insights
Slate Auto has been discreet about its investors since its emergence from stealth mode last year. It has been revealed that Guggenheim Partners CEO Mark Walter is a significant backer, leading the Series C funding round and holding substantial stakes in both Slate and Carvana.
Walter's investment in Carvana includes 8% of the Class B common stock, making him one of the largest shareholders alongside the Garcia family.
Future Implications
Carvana's regulatory filings have hinted at a warrant for a “private consumer products company,” valued at $1.5 million, set to vest based on performance goals. While the specific company remains unnamed, speculation suggests it could be Slate Auto.
This partnership could pave the way for Carvana to enhance its offerings and improve its competitive edge in both the used and new car markets.
