Carplay? Next?

[MNLightning]

At least they roll out updates without excessive delay. But Apple shines where Rivian is an abject failure.
@DJG The kick in the Nutz is when you want to use the Main Screen to perhaps A) find a charger B) send or have it read a text C) Use your Calendar D) Listen to voicemail E) Waze F) Music like Pandora, Tital, SiriusXM, Functional Spotify

At least the Tesla future “might “ include a StarLink connection with “possible” Pi phone integration. I’m not sure what waiting brings with Rivian. At the brisk rate of the 600 person strong software team rolling out updates Rivian should be on par with CP or AA easily within a decade. As long as CP and AA don’t improve

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[DJG]

At least they roll out updates without excessive delay. But Apple shines where Rivian is an abject failure.
@DJG The kick in the Nutz is when you want to use the Main Screen to perhaps A) find a charger B) send or have it read a text C) Use your Calendar D) Listen to voicemail E) Waze F) Music like Pandora, Tital, SiriusXM, Functional Spotify

At least the Tesla future “might “ include a StarLink connection with “possible” Pi phone integration. I’m not sure what waiting brings with Rivian. At the brisk rate of the 600 person strong software team rolling out updates Rivian should be on par with CP or AA easily within a decade. As long as CP and AA don’t improve

I think the main problem with this endless debate is that each side uses a completely different scoring system, so it's a fruitless exercise to try and debate it as if it is an objective contest. I care as much if not more about how a UI feels to use, versus how it works or what features it has. Rivian is trying to create a product like a restauranter creates a restaurant. They create a menu and a dining experience that's curated to the experience they want customers to have. Golden Corral just gives everyone everything they could possibly want with the goal of appealing to the largest number of people. They are two different things for two different customers, and each has their place in the market.

Carplay would undoubtedly appeal to more customers than solely having the Rivian offering. However, Rivian is not (currently) pursuing a goal of maximizing aggregate demand and being a mass market brand. They only want/need to sell 65k R1 vehicles a year, and they could do that even if they ripped out the center display and just had an empty dash with no infotainment at all, but certainly can with it in its current state without improvement. Toyota sold many times that of Tacomas and 4Runners for a long time without much more than that before integrating CP/AA. At a different and more comparable price point, Land Rover has been successful selling vehicles for a long time with a crap infotainment that's worse that what Rivian has currently.

Maybe that changes with the broader market R2 vehicles, but that's several years away and who knows what the Rivian offering will be at that point. If they continue nailing the rest of the vehicle, it gives them vast leeway in what they do for infotainment. The question will be if it comes down to principle (design & product philosophy) or economics (revenue and profits), which one wins. As a customer I'm hoping for the former, as an investor, the jury is still out.

 

[DJG]

I think the main problem with this endless debate is that each side uses a completely different scoring system, so it's a fruitless exercise to try and debate it as if it is an objective contest. I care as much if not more about how a UI feels to use, versus how it works or what features it has. Rivian is trying to create a product like a restauranter creates a restaurant. They create a menu and a dining experience that's curated to the experience they want customers to have. Golden Corral just gives everyone everything they could possibly want with the goal of appealing to the largest number of people. They are two different things for two different customers, and each has their place in the market.

Carplay would undoubtedly appeal to more customers than solely having the Rivian offering. However, Rivian is not (currently) pursuing a goal of maximizing aggregate demand and being a mass market brand. They only want/need to sell 65k R1 vehicles a year, and they could do that even if they ripped out the center display and just had an empty dash with no infotainment at all, but certainly can with it in its current state without improvement. Toyota sold many times that of Tacomas and 4Runners for a long time without much more than that before integrating CP/AA. At a different and more comparable price point, Land Rover has been successful selling vehicles for a long time with a crap infotainment that's worse that what Rivian has currently.

Maybe that changes with the broader market R2 vehicles, but that's several years away and who knows what the Rivian offering will be at that point. If they continue nailing the rest of the vehicle, it gives them vast leeway in what they do for infotainment. The question will be if it comes down to principle (design & product philosophy) or economics (revenue and profits), which one wins. As a customer I'm hoping for the former, as an investor, the jury is still out.

I'd add to this that providing CP/AA is a zero value add feature, in the sense that it is not proprietary and is available on 99% of the rest of the market. It's a commodity, and has become ubiquitous with most automakers because they largely make commodity vehicles, and when you do that, there is an arms race to add more and more commodities to your commodity to one up the competition. It's a losing strategy and is why the market values those companies for what they are, manufacturers of commodity products with correspondingly low margins. CP/AA has not provided any of them with extraordinary growth or improved margins, because everyone has it.

So given that, it makes sense to focus attention and resources on innovation to create proprietary and value adding features in your product that can't be replicated (quickly at least) by the competition and therefore allow you to capture excess profit. Rivian has done that with their current vehicles, there isn't a single other brand, other than Tesla, that has such a dominant position of strength in their product category vs. competitors (don't mistake supply constrained current sales with market positioning). Tesla used to, but that has started to wane as the advantage of their charging network (which is ultimately a commodity too in the long run, it's not much more than a utility provider) and the availability of similar vehicles (there are currently no similar vehicles to a Rivian like there are to a Tesla). But they are still close with Rivian based on brand strength and way ahead of the rest of the field. Ford will soon have to compete with Chevy and Ram in the full size BEV work truck segment, just as they have since the dawn of time, and those will follow history and largely be interchangeable commodity products that rely on CP/AA for their infotainment systems (which many people will like but provides no value to prevent customers from buying a competing product). As competition increases, they will have to return to relying on cost optimizing measures to maintain profitability as they always have, which leads to worse product.

 

[Obioban]

I'd add to this that providing CP/AA is a zero value add feature, in the sense that it is not proprietary and is available on 99% of the rest of the market. It's a commodity, and has become ubiquitous with most automakers because they largely make commodity vehicles, and when you do that, there is an arms race to add more and more commodities to your commodity to one up the competition. It's a losing strategy and is why the market values those companies for what they are, manufacturers of commodity products with correspondingly low margins. CP/AA has not provided any of them with extraordinary growth or improved margins, because everyone has it.

So given that, it makes sense to focus attention and resources on innovation to create proprietary and value adding features in your product that can't be replicated (quickly at least) by the competition and therefore allow you to capture excess profit. Rivian has done that with their current vehicles, there isn't a single other brand, other than Tesla, that has such a dominant position of strength in their product category vs. competitors (don't mistake supply constrained current sales with market positioning). Tesla used to, but that has started to wane as the advantage of their charging network (which is ultimately a commodity too in the long run, it's not much more than a utility provider) and the availability of similar vehicles (there are currently no similar vehicles to a Rivian like there are to a Tesla). But they are still close with Rivian based on brand strength and way ahead of the rest of the field. Ford will soon have to compete with Chevy and Ram in the full size BEV work truck segment, just as they have since the dawn of time, and those will follow history and largely be interchangeable commodity products that rely on CP/AA for their infotainment systems (which many people will like but provides no value to prevent customers from buying a competing product). As competition increases, they will have to return to relying on cost optimizing measures to maintain profitability as they always have, which leads to worse product.

Not zero value add-- If Rivian doesn't add carplay, I will buy a silverado EV. If they do add carplay, I will buy a rivian. They have until the 2nd year of production of the silverado EV to do it, before I'm lost as a customer forever.

A good friend of mine is in the exact same position-- he wants an R1S, but won't be buying it because no carplay.

I am not alone-- 79 percent of new car buyers will only consider buying a car if it comes with Apple CarPlay. That is far from inconsequential.

This is a hugely important feature to a large number of buyers.

Not all features have to be distinguishing-- some are just baseline requirements. All cars (in the US, anyway) have air conditioning, but that doesn't mean it's not worth including when building a new car.

Similarly, I have never purchased a Tesla (car-- I do have their roof and 4 powerwalls) because of their Carplay (and part support) stance. I will be buying a Lucid once the smaller battery pack versions start shipping.

 

[Scoiatael]

Not zero value add-- If Rivian doesn't add carplay, I will buy a silverado EV. If they do add carplay, I will buy a rivian. They have until the 2nd year of production of the silverado EV to do it, before I'm lost as a customer forever.

A good friend of mine is in the exact same position-- he wants an R1S, but won't be buying it because no carplay.

I am not alone-- 79 percent of new car buyers will only consider buying a car if it comes with Apple CarPlay. That is far from inconsequential.

This is a hugely important feature to a large number of buyers.

Not all features have to be distinguishing-- some are just baseline requirements. All cars (in the US, anyway) have air conditioning, but that doesn't mean it's not worth including when building a new car.

Similarly, I have never purchased a Tesla (car-- I do have their roof and 4 powerwalls) because of their Carplay (and part support) stance. I will buy buying a Lucid once the smaller battery pack versions start shipping.

That 79 percent statistic that Apple came up with is bullshit. Apple has less than 60% of cell phone market share in the US. Then you also have to add in people like my parents who barely even use their in car infotainment system and couldn't care less what it supports.

Rivian's navigation system is not great, but I honestly don't see them ever allowing Car Play or Android Auto. If Car Play is that important to you, then Ford or GM/Chevy is your best bet. Chances are you won't be able to get a truck from either of those until 2025 though, unless you have a reservation already.

 

[Obioban]

That 79 percent statistic that Apple came up with is bullshit. Apple has less than 60% of cell phone market share in the US. Then you also have to add in people like my parents who barely even use their in car infotainment system and couldn't care less what it supports.

Rivian's navigation system is not great, but I honestly don't see them ever allowing Car Play or Android Auto. If Car Play is that important to you, then Ford or GM/Chevy is your best bet. Chances are you won't be able to get a truck from either of those until 2025 though, unless you have a reservation already.

Apple has 60% of the total cell phone market share in the USA, but, of people who have enough money to buy a car new (which is what their quote cited-- new car buyers), they're MUCH higher-- likely >95%.

I'm fine waiting-- I have a truck that's fine until one exists that isn't a downgrade (which I would view any truck without carplay as).

Plus, the midgate on the silverado EV is pretty compelling, and actually fast charging will be a nice feature on an EV with a battery as large as the Rivian/Silverado EV

 

[fotoflux]

The Reason Rivian is avoiding adding CarPlay is because they based their IPO valuation partially on the subscription service model. If CarPlay offers features for "free" like nav updates, internet connectivity, etc, then the value prop of their subscription service drops and the Total addressable market size shrinks because more people decide that the other features included like autonomous driving alone aren't worth the monthly cost.

If they can't get customers to pay their subscription fee, then Rivian is just another money-losing EV maker.

 

[Obioban]

The Reason Rivian is avoiding adding CarPlay is because they based their IPO valuation partially on the subscription service model. If CarPlay offers features for "free" like nav updates, internet connectivity, etc, then the value prop of their subscription service drops and the Total addressable market size shrinks because more people decide that the other features included like autonomous driving alone aren't worth the monthly cost.

If they can't get customers to pay their subscription fee, then Rivian is just another money-losing EV maker.

Yep, this is certainly the why.

The question is, will that model hold up once there's sufficient EV truck supply to meet EV truck demand. Right now they have no consequences from this, because however many potential customers they're losing, they have more demand than supply anyway (since their production numbers are low and the only other EV truck on the market is barely spun up yet).

 

[DJG]

The Reason Rivian is avoiding adding CarPlay is because they based their IPO valuation partially on the subscription service model. If CarPlay offers features for "free" like nav updates, internet connectivity, etc, then the value prop of their subscription service drops and the Total addressable market size shrinks because more people decide that the other features included like autonomous driving alone aren't worth the monthly cost.

If they can't get customers to pay their subscription fee, then Rivian is just another money-losing EV maker.

I think you should read the prospectus and report back what percentage of total potential revenue the subscription services contributed (hint: very little). You should also do some research on the last sentence, because there is only one pure EV maker that has ramped up production, and they make plenty of money (without a subscription service by the way).

The point of making your own software is that it is proprietary and gives people a reason to buy your vehicle vs. a competitor. CP/AA is a reason some people won't buy a vehicle, but it's not a reason they will buy a specific one or to remain a customer of the brand (because it's a commodity found on 99% of the available market).

Also, it wasn't their valuation, it was the market's, or buyers of the securities. In fact, the market told them it was worth more than they initially thought (at the time).

 

[Sgt Beavis]

Um, yeah that would go over great with the 600 person deep software team at Rivian that believed they were part of something unique and different in joining them to create something of their own. RJ walks in, hey guys keep up the great work. Oh, by the way, we're going to implement a fully integrated Car Play feature so owners can completely ignore everything you're doing/creating. Cheers.

What a kick in the nuts/ovaries.

It sure would help the 5% labor downsizing they are reportedly planning. They would get that number just in software engineers quitting, saving them tons in severance packages.

Um, no.
In my Mini, I use carplay for everything. That's because the Mini's software kinda sucks. My Jeep is moderately better and I use things like the off road pages. Carplay is for Waze, Gaia (for off road), and Apple Music. That's it. That really all I care about.

I've driven a couple Teslas and I would use a lot of their native apps, but my navigation is still going to slide towards Waze and Gaia. Everything else, I would use Tesla's software (which is pretty good).

Even if Rivian didn't put Carplay or Android Auto support on there, they can still open up that Android virtual machine and run Waze or other navigation apps there. That wouldn't be perfect, but I'd at least be happy for the most part.

All that said, none of this is going to keep me from getting my R1T. This is especially true after finally driving one. There are simply too many positives for with this truck.

 

[Obioban]

I think you should read the prospectus and report back what percentage of total potential revenue the subscription services contributed (hint: very little). You should also do some research on the last sentence, because there is only one pure EV maker that has ramped up production, and they make plenty of money (without a subscription service by the way).

The point of making your own software is that it is proprietary and gives people a reason to buy your vehicle vs. a competitor. CP/AA is a reason some people won't buy a vehicle, but it's not a reason they will buy a specific one or to remain a customer of the brand (because it's a commodity found on 99% of the available market).

Also, it wasn't their valuation, it was the market's, or buyers of the securities. In fact, the market told them it was worth more than they initially thought (at the time).

They said they expect to make an average of $16,000 in post sale subscription revenue per truck sold-- so no small percent.

Also, you can certainly have differentiated carplay, especially if you have a lot of, or large, screens.

Carplay in a Civic looks like this:

But carplay can fill all your screens and look like this:

or

 

[Obioban]

Um, no.
In my Mini, I use carplay for everything. That's because the Mini's software kinda sucks. My Jeep is moderately better and I use things like the off road pages. Carplay is for Waze, Gaia (for off road), and Apple Music. That's it. That really all I care about.

I've driven a couple Teslas and I would use a lot of their native apps, but my navigation is still going to slide towards Waze and Gaia. Everything else, I would use Tesla's software (which is pretty good).

Even if Rivian didn't put Carplay or Android Auto support on there, they can still open up that Android virtual machine and run Waze or other navigation apps there. That wouldn't be perfect, but I'd at least be happy for the most part.

All that said, none of this is going to keep me from getting my R1T. This is especially true after finally driving one. There are simply too many positives for with this truck.

I wouldn't expect them to open up an Android VM, because then your could run a carplay app in that VM

 

[DJG]

They said they expect to make an average of $16,000 in post sale subscription revenue per truck sold-- so no small percent.

Think you need to go back and read the prospectus. First, everything listed in that section was done so at a total gross potential revenue per vehicle sold, but users would need to apply their own assumptions as to the % take rate for each.

$10,000 of that was entirely based on autonomous driving software, either as a lump sum (which was the Tesla model at the time) or an ongoing subscription (where Tesla is headed and probably everyone else). So, that has zero to do with CP/AA.

$5,500 was from the Subscription/Membership. So, $550/year estimated, and remember that includes your data plan (which accounts for half that total in many competing vehicles, ones that have CP/AA and still offer this package that people pay for). It also includes things like private gatherings and experiences (they had grand visions of buying remote land and providing that to owners for private get aways and curated adventures). In vehicle software highlights things like additional drive modes and a "premium service package". There isn't anything discussed that appears to be in competition with CP/AA.

Flexible Membership and Software Services
We aim to maintain strong customer engagement through the entire ownership journey, not just during the purchase process. Through a variety of software enabled services we will drive higher customer satisfaction and brand loyalty while generating recurring revenue over the life of the vehicle. Our flagship offering is the Rivian membership program. The membership platform strengthens the value customers receive from their vehicle, the community of Rivian owners, and Rivian’s ethos of adventure and stewardship. Member benefits will evolve over time to continually improve the value of membership and will incorporate member-only vehicle features and programming that include a wide range of guided outdoor experiences.

Beyond the membership program, we also plan to offer other bundled services to improve the customer experience, such as a premium vehicle service package and a premium in-vehicle software offering. The premium in-vehicle software offering is expected to include expanded access to additional autonomous driving capabilities and vehicle driving modes.

We expect these programs to deliver greater convenience and capability for our members and expand our margin profile over time.

If you project out to 2030 (which I did when evaluating the IPO program), and assume that by then they are selling over a million consumer vehicles per year, and cumulatively have 5 million consumer vehicles on the road, and that 50% of them are paying $550/year for the Membership/Subscription (which includes a lot of things, potentially none of which have anything to do with CP/AA), the share of total revenue from this program would only be 1.6%.

So back to my earlier point, they are trying to actually create something of their own/proprietary, and make money from selling that, rather than just cobble together what CP/AA offer and try to get people to pay for that.

 

[fotoflux]

I think you should read the prospectus and report back what percentage of total potential revenue the subscription services contributed (hint: very little). You should also do some research on the last sentence, because there is only one pure EV maker that has ramped up production, and they make plenty of money (without a subscription service by the way).

The point of making your own software is that it is proprietary and gives people a reason to buy your vehicle vs. a competitor. CP/AA is a reason some people won't buy a vehicle, but it's not a reason they will buy a specific one or to remain a customer of the brand (because it's a commodity found on 99% of the available market).

Also, it wasn't their valuation, it was the market's, or buyers of the securities. In fact, the market told them it was worth more than they initially thought (at the time).

If 10% of the LTR of the car is subscription, it's the difference between being profitable and not. Their expectations for insurance and financing are pretty frothy too considering both are commodities and people tend to cross-shop those based on price alone.

I don't know how many people buy a car because of the UI. I think they buy them in-spite of their terrible UI. Rivian has a long way to prove that their UI is better than anybody. Right now, they are sub-par to Tesla for sure.

People buy cars because of what they can do for them and how they make them feel. Until the cars actually drive themselves, the primary driver of any car purchase is how it drives from point A to B and how you feel while doing it. People don't buy cars because of how pretty their nav maps look or how much better the Spotify interface is. ...today.

How many reservation holders plunked down their deposits when Rivian wowed them with the story behind their UI and their touch screens? How many plunked down deposits when they saw a practical off road vehicle with good range and a beautiful interior and exterior design that goes zoom zoom?

 

[dsmithsalinas]

I would be happy with an Apple Music app. That’s really my key ask for CarPlay/Apple related on Rivian.

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