Future Cost for Rivian Subscription Services

[Mcfly Rivian]

I believe this has been discussed before but couldn't find the thread. I took delivery on 8/16 and was told all vehicle services are free for a year. Wifi Hotspot I know is is one of those services. My SC delivery tech did not know what else would be subscription based or what it would cost. Does anyone have any insight into this?

I would be disappointed if other functions like nav, over the air Spotify, driver plus, drive modes, ect became pay only. I know some companies are building cars with heated seats and other hardware and charging monthly or a one time fee to unlock them. NOT a fan of that in the least.

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[Andystroh]

Yeah, really hoping nothing that is on the truck already is changed to part of the subscription (I guess I don't care all that much about the hotspot). That would feel a little cheap. I feel like I heard at one point they would only require you to pay for "new features" as part of the subscription, but I doubt that was written down and is subject to change. I guess I can't count on free charging at their chargers indefinitely but I will certainly try to take advantage of it while it lasts.

 

[PastyPilgrim]

They've been super tight-lipped on what the subscription will include and what it will cost. When I asked my guide pre-delivery about it she herself even seemed a little concerned that Rivian hasn't figured it out since the first deliveries are coming up on a year of ownership.

Given that there's nothing about a subscription, trial or otherwise, mentioned anywhere in any of the contracts, documents, etc. I wouldn't be surprised if the subscription has less impact on early deliveries. None of us agreed to time-limited access to anything (nav, data, etc) so the sub may only be for new capabilities, or early orders may be grandfathered into receiving existing capabilities without the sub.

Until Rivian announces something though, it's all just pure speculation so you can't really make any decision one way or another when it comes to whether the existence of a sub or its price would impact your decision to buy a Rivian.

 

[Firewired]

Tesla was the same way with their data connectivity package. Saying for years that they were going to start charging for it. It includes live traffic data, streaming music, the ability to watch video content when stopped, satellite view maps, and remotely see what sentry cameras are seeing via the app. Tesla charges $9.99/mo or $99/year for it.

 

[COdogman]

They have been very careful to not say what may or may not be subscription based features. We do know they said in a report to investors that subscription services will be a significant revenue stream for them in the future. So I read that to mean we will be at least somewhat unhappy when that day comes…

 

[Mcfly Rivian]

They have been very careful to not say what may or may not be subscription based features. We do know they said in a report to investors that subscription services will be a significant revenue stream for them in the future. So I read that to mean we will be at least somewhat unhappy when that day comes…

That's right! I think it was in the S1 filings when they went public last year. Might have been a mention of numbers or percentages as well.

 

[R1Sky Business]

Whatever they decide initially....will likely keep morphing as more users come on-board

 

[kylealden]

It's very unlikely that anything they've marketed as a standard feature (nav, existing drive modes, Driver+) will be tied to the subscription.

I'd expect it to be value-added services, new features, and anything that requires significant data (which costs Rivian money). So:

• Media playback (maybe Spotify, definitely future video streaming)
• Free/discounted DCFC
• Off-road recovery
• Things they've alluded to like guided off-road routes
• Maybe a few token things like traffic in nav
• Future drive modes (Tank Turn?) or gimmick features (farting, games, etc.)

 

[DJG]

They have been very careful to not say what may or may not be subscription based features. We do know they said in a report to investors that subscription services will be a significant revenue stream for them in the future. So I read that to mean we will be at least somewhat unhappy when that day comes…

To be clear, there were two primary categories of subscription revenue laid out in the S1.

One was autonomous driving features, and it was by far the larger of the two in potential revenue. It was projected at a potential of $10k over a vehicle lifespan (10 years was the assumption used), whether that be in a lump sum or ongoing subscription (likely the latter as that is where everything is headed. That would be for enhanced Driver+ features that don't exist today.

The second was the Membership, which itself was expected to have multiple components and had the potential of about $5k over the lifespan. This is where the assumption came from that it might be around $500/year. Now, this (at least at one point in time) was to include your AT&T data (for hotspot, live traffic, etc.), free RAN charging, enhanced drive modes and other vehicle features (that don't currently exist), access to exclusive events, on/off road recovery services, etc. Ultimately I think they have continued to think about what this will all be in practice, and I could certainly see them break it up, as there are plenty of people that won't care about any one or more of those things, but want other things. They'll do whatever they think is best to maximize total revenue.

For both of these things, they made no assumptions on the take rate, that was left for investors to come up with on their own. The just projected that it would be offered and the potential total revenue per vehicle that opted for it. None of it would be huge sources of revenue, but they could be disproportionately large sources of profit, because the margins on software are 60%-70% vs. perhaps 20% if they are lucky when running at full capacity on the vehicles.

I would expect that when they are ready, they will announce the details and that the clock starts then for everyone with a vehicle, and upon delivery for people that don't yet. Or, they could easily just make it delivery for everyone, because the only thing you'd lose by not signing up is data, which you would already know what that entails and whether you want it or not.

 

[jjswan33]

I’m with @kylealden - I suspect and have gotten the impression that the ATT service will be part of the subscription meaning anything on the truck (ie everything) may not work without it. Only possible alternative is if you can tether a cell phone etc to get a data connection for those services, we will see if they allow that

 

[COdogman]

To be clear, there were two primary categories of subscription revenue laid out in the S1.

One was autonomous driving features, and it was by far the larger of the two in potential revenue. It was projected at a potential of $10k over a vehicle lifespan (10 years was the assumption used), whether that be in a lump sum or ongoing subscription (likely the latter as that is where everything is headed. That would be for enhanced Driver+ features that don't exist today.

The second was the Membership, which itself was expected to have multiple components and had the potential of about $5k over the lifespan. This is where the assumption came from that it might be around $500/year. Now, this (at least at one point in time) was to include your AT&T data (for hotspot, live traffic, etc.), free RAN charging, enhanced drive modes and other vehicle features (that don't currently exist), access to exclusive events, on/off road recovery services, etc. Ultimately I think they have continued to think about what this will all be in practice, and I could certainly see them break it up, as there are plenty of people that won't care about any one or more of those things, but want other things. They'll do whatever they think is best to maximize total revenue.

For both of these things, they made no assumptions on the take rate, that was left for investors to come up with on their own. The just projected that it would be offered and the potential total revenue per vehicle that opted for it. None of it would be huge sources of revenue, but they could be disproportionately large sources of profit, because the margins on software are 60%-70% vs. perhaps 20% if they are lucky when running at full capacity on the vehicles.

I would expect that when they are ready, they will announce the details and that the clock starts then for everyone with a vehicle, and upon delivery for people that don't yet. Or, they could easily just make it delivery for everyone, because the only thing you'd lose by not signing up is data, which you would already know what that entails and whether you want it or not.

That all makes perfect sense. Thank you for that clarification.

 

[Mcfly Rivian]

To be clear, there were two primary categories of subscription revenue laid out in the S1.

One was autonomous driving features, and it was by far the larger of the two in potential revenue. It was projected at a potential of $10k over a vehicle lifespan (10 years was the assumption used), whether that be in a lump sum or ongoing subscription (likely the latter as that is where everything is headed. That would be for enhanced Driver+ features that don't exist today.

The second was the Membership, which itself was expected to have multiple components and had the potential of about $5k over the lifespan. This is where the assumption came from that it might be around $500/year. Now, this (at least at one point in time) was to include your AT&T data (for hotspot, live traffic, etc.), free RAN charging, enhanced drive modes and other vehicle features (that don't currently exist), access to exclusive events, on/off road recovery services, etc. Ultimately I think they have continued to think about what this will all be in practice, and I could certainly see them break it up, as there are plenty of people that won't care about any one or more of those things, but want other things. They'll do whatever they think is best to maximize total revenue.

For both of these things, they made no assumptions on the take rate, that was left for investors to come up with on their own. The just projected that it would be offered and the potential total revenue per vehicle that opted for it. None of it would be huge sources of revenue, but they could be disproportionately large sources of profit, because the margins on software are 60%-70% vs. perhaps 20% if they are lucky when running at full capacity on the vehicles.

I would expect that when they are ready, they will announce the details and that the clock starts then for everyone with a vehicle, and upon delivery for people that don't yet. Or, they could easily just make it delivery for everyone, because the only thing you'd lose by not signing up is data, which you would already know what that entails and whether you want it or not.

Thanks @DJG for posing this. Will be interesting what they come up with. Maybe on the next investor meeting someone will bring it up.

 

[timf]

I would hope they offer an option WITHOUT the hot spot. Just let the truck access what it needs for built-in features and let me use my existing cell phone data for everything else.

 

[DJG]

I’m with @kylealden - I suspect and have gotten the impression that the ATT service will be part of the subscription meaning anything on the truck (ie everything) may not work without it. Only possible alternative is if you can tether a cell phone etc to get a data connection for those services, we will see if they allow that

It absolutely will, that's standard industry practice going back 15 years. The question is whether they break that out as a separate package or just have a single Membership package. I have a feeling they will break it out separately, because the take rate on that will be way higher than the take rate on the rest of the features of Membership, so that's what will maximize revenue and also maximize customer satisfaction.

The tricky part of the data is the Nav, because they use the cloud to run the routing/navigation, and you'd also need data for charging station information. The question is whether they can/will carve any of that out of the data package as an essential need of owning the vehicle. But, I personally don't know how you tell AT&T to give them data, but only for specific purposes?? Perhaps it's easy, dunno.

 

[DJG]

I would hope they offer an option WITHOUT the hot spot. Just let the truck access what it needs for built-in features and let me use my existing cell phone data for everything else.

The hotspot isn't an expense for them, it just transmits the data the truck is receiving so other devices can connect. You either have data coming in (which you'll have to pay for) and can use the hotspot or you don't have data and thus don't have a hotspot.

In the latter case, you can still just use your phone as a hotspot to tether an iPad or laptop. So, the hotspot itself is nothing really worth paying for, unless AT&T offers better service than your cell provider in the places you want to use a hotspot.

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