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InsideEVs Article : Rivian Focuses On Amazon Delivery Van Over R1T Electric Truck

yizzung

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My two cents: from a business perspective, very smart to focus on Amazon. Why?

-Amazon owns a piece of the company; they were willing to invest a lot, when Rivian needed capital;
-Amazon alone has provided about 2x the R1S and R1T holders - one 'person', double the orders;
-Amazon is tough: if they don't get what they want, the contract pretty much let's them walk away; Rivian can probably predict somewhat accurately how many of us will walk.
Don’t disagree — there are billions of reasons to keep Amazon happy! :)

Ordering 100K commercial vehicles (10K per year) is nice but it won’t represent 2X the volume of consumer orders at the factory. It should barely represent 10% of the annual volume once orders/production ramp. Maybe 20% this year at most?

Also, the article cited not much actual reporting of anything. Didn’t say what “focus” on Amazon actually means. But whatever.
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DB-EV

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Don’t disagree — there are billions of reasons to keep Amazon happy! :)

Ordering 100K commercial vehicles (10K per year) is nice but it won’t represent 2X the volume of consumer orders at the factory. It should barely represent 10% of the annual volume once orders/production ramp. Maybe 20% this year at most?

Also, the article cited not much actual reporting of anything. Didn’t say what “focus” on Amazon actually means. But whatever.
Yep. Clarification: my understanding from skimming the filing: there are like a total of 51k cancellable R1T & R1S orders, but there is no hard promise as to when it is delivered (and I am sure our click through probably says somewhere, it could be never).

Amazon has an ironclad contract that largely lets them walk at any time without many consequences, and incents Rivian to execute.

All good.
 

buddha2lotus

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My two cents: from a business perspective, very smart to focus on Amazon. Why?

-Amazon owns a piece of the company; they were willing to invest a lot, when Rivian needed capital;
-Amazon alone has provided about 2x the R1S and R1T holders - one 'person', double the orders;
-Amazon is tough: if they don't get what they want, the contract pretty much let's them walk away; Rivian can probably predict somewhat accurately how many of us will walk.
I agree and in fact it was what convinced me to pre-order the R1S sight unseen. Having previously spoken with a relative who worked for Acer which made servers for Amazon at the time, he made it quite clear that although Amazon was a very tough customer to please, it was a highly valued customer who not only always paid on time but also provided technical expertise on the design of the servers. So I look at Amazon as being a very positive part of Rivian considering the vast amount of technology support Amazon can provide as well as financial support. I am now may be even a bit more excited about the chance to invest in the company pre-IPO than even getting the R1S.
 

AdamsFan1983

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I would say that if it were just from Teslarati. But Bloomberg is pretty solid in their reporting.
Personally I’d be more willing to believe that if they hadn’t published one critical piece after another about Rivian for the past month.

First they dinged a truck that’s never claimed to be a work truck, for not being a work truck. Then, they dinged a start up company for, gasp, “changing course” nee’ “pivoting,” now this silly piece.

Ultimately we’ll all get our vehicles when we get them, but let’s not pretend Bloomberg is producing accurate and fair reportage on Rivian.

Theres obviously an agenda there.
 

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ja_kub_sz

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My two cents: from a business perspective, very smart to focus on Amazon. Why?

-Amazon owns a piece of the company; they were willing to invest a lot, when Rivian needed capital;
-Amazon alone has provided about 2x the R1S and R1T holders - one 'person', double the orders;
-Amazon is tough: if they don't get what they want, the contract pretty much let's them walk away; Rivian can probably predict somewhat accurately how many of us will walk.
Amazon always gets what Amazon wants ?, for better or for worse.

But let me pitch this alternate reality question.

Would Tesla be what they are today if they focused on Semi Trucks?

I'm going to say no. I don't think they'd be anywhere near what they are today if they went the commercial truck route.

Delivery vehicles might move goods, and be an economic powerhouse, but consumer auto sales are more of a force to be reconded with in terms of money to be made. Getting R1T's out into public hands ASAP will beget more future Rivian sales. Amazon delivery vehicles are an income stream (important), but not the torrent of money that consumer EV's would be if Rivian was putting EV's on the road. Not too mention building brand recognition (hey look it's the Amazon delivery vehicle van company).

Also this is kind of a "he who strikes first striles last" situation.

R1T sales gobble up Lightning sales and other EV sales, that now will be filled by the Rivian's competitors. Selling an R1T today, means ford won't sell a Lightning tomorrow (in some cases) and more people will gladly wait to purchase an established quality product. Look at the model 3 and Y based on the Model S and X success. Right now Rivian hasn't proven they have a quality product, hence the whole "I wanted my Rivian yesterday! Now I'm getting a lightning!".

People are impatient, especially when dealing with something they don't know enough about to justify being patient.

Amazon gave Rivian a bunch of money (I get it), and Amazon isn't going anywhere any time soon. But Rivian hasn't gone anywhere yet (thats the part that's extremly important) and might not if they're focused too much on Amazon delivery vehicles.

Amazon delivery vehicles don't make people want to hand over their preorder dollars and wait months to years like people had done with the Model 3 and Y. A Tesla Semi wouldn't have convinced them to either, but the Model S did.

Just my thoughts.

I would like R1T production to be Rivian's #1 priority and maybe Q4 2022 Amazon delivery vehicles can start up once they've secured public belief in their product.

Just seems like timing is everything and there's no time like the present!

But I guess Amazon will be more profitable not paying such high gas bills... But I'd rather see two successful American companies not just one.
 
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Autolycus

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R1T sales gobble up Lightning sales and other EV sales, that now will be filled by the Rivian's competitors. Selling an R1T today, means ford won't sell a Lightning tomorrow in some cases
An RPV sale today is one less electric Ford Sprinter sale tomorrow, and will get good grace with one of the world leaders in logistics. Individual consumers are often drawn to products with limited availability. It makes them feel exclusive. Commercial buyers very rarely care about that. They just want something that works and that helps their bottom line.
 

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The math here is really easy.

50,000 R1 preorders as of September

100,000 Amazon van preorders.

Amazon can basically walk away for any reason if delivery expectations aren't met, Rivian risks losing a huge chunk of their ramp income and the key differentiator for them as an EV startup.

If deliveries of the R1 series are delayed, they may lose 10% of preorders (doubtful).

100,000, or 5,000? That's an easy decision to make when it comes to prioritizing resources. I would much rather Rivian meet their expectations with Amazon at the risk of delaying delivery of my R1S than get my R1S earlier at the risk of endangering their Amazon deal because I want Rivian to still be around and financially viable by the time my warranty runs out.
 

Pherdnut

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WTH does "According to Bloomberg via Tesalarati " mean? And no link? Was this a phone conversation between "Tesalarati" and Bloomberg? This is sloppy AF. Also, I've seen Bloomberg shill for hedgefunds. They're no more reliable a source than Teslarati, although seems a little early for them to be doing that with Rivian not being public yet.
 

EVTrucking

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IMO Amazon van production is not the primary driver of what appears to be nearly if not 0 production and delivery of LEs.

I think it is related to fundamental issues going from pilot line to full production. There may even be a regulatory issue. Which is to be expected.

The silence from Rivian is deafening and highly frustrating but I don’t think other established OEMs would be any more transparent.

Rivian still needs 1500+ people!
 

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Aroohoo

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Ordering 100K commercial vehicles (10K per year) is nice but it won’t represent 2X the volume of consumer orders at the factory. It should barely represent 10% of the annual volume once orders/production ramp. Maybe 20% this year at most?
It doesn't make a big difference, but it is actually 100k by 2025 (Jan 1 or Dec 31, unknown) according to the S-1; that's either 25k or 33k a year depending on if it is beginning or end of 2025. That is the existing order and there is a first right of refusal for 2 years after that. Also, there is nothing to say that Amazon doesn't add more to be delivered by 2025.
 

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WTH does "According to Bloomberg via Tesalarati " mean? And no link? Was this a phone conversation between "Tesalarati" and Bloomberg? This is sloppy AF. Also, I've seen Bloomberg shill for hedgefunds. They're no more reliable a source than Teslarati, although seems a little early for them to be doing that with Rivian not being public yet.
I'm pretty sure it means the InsideEV writer read a blog post on Teslarati which was itself based on the writer having read the Bloomberg article and done no independent reporting. Yes, sloppy AF. The InsideEV writer at a minimum has an obligation to go read the original Bloomberg article and discuss it directly. If that was a sloppy "hat-tip" to acknowledge they learned about the Bloomberg article from reading Teslarati and then read the article themselves, then that's only marginally better.
 

G_Land79

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Without this Amazon deal they would not have the up front cash to start building their charger and service center infrastructure.

We're just putting down 1000 bucks and waiting (totalling 50 million or so in cash to work with). Amazon has invested over a billion dollars to get it moving.

In addition, while they have not actively communicated through the guides well about delivery recently, the support questions still say guides will reach out to LE holders by November about delivery and starting January 2022 for us others. Thats a lot of time for them to be able to focus almost purely on the vans. If guides reach out near Thanksgiving about LE orders that is likely to lock down options and then production starts. Deliveries will likely be first half 2022 for LEs and through mid 2023 for all others reserved currently (big guess on the others due to supply chain issues still)
 

kvenom

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Or think of it this way: If we get our trucks early and Amazon bails, we now have collector's items which we can hawk at massive prices! :like:
 

yizzung

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It doesn't make a big difference, but it is actually 100k by 2025 (Jan 1 or Dec 31, unknown) according to the S-1; that's either 25k or 33k a year depending on if it is beginning or end of 2025. That is the existing order and there is a first right of refusal for 2 years after that. Also, there is nothing to say that Amazon doesn't add more to be delivered by 2025.
Word. I haven't read the S-1. (Trying to have a life outside of waiting for my toy to be delivered...) Just parroting something I had read here or on the interwebs. I think what I gathered was that they were shooting for (1) delivery of about 10K vans AND 100% of 50K their pre-orders trucks/SUVs in 2022, which is how I did my math.

But someone else said it better: this is not a commercial van company that's trying to build a consumer product on the side. It's the other way around. Their ultimate market cap will be determined by their ability to do the latter not the former. Volvo sells like 170K commercial trucks but closer to 700K consumer vehicles annually. Doesn't take much imagination to assume margins are way better in the consumer world as these commercials vehicles are basically commodities.

Regardless, I still think this is lazy "reporting" that didn't contain much news. More aimed at creating an impression that Rivian is doing one thing at the expense of another, based on no real data, and no explanation of how those actions are going to lead to different outcomes. But they did get a bunch of internet people to pay attention to them so I guess they won! :)
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