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

WylieD

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Amazon is a big plus for Rivian and for our chances of getting R1s sooner rather than later.

Amazon's investment may well have brought in other big investors, who figured that if it's good enough for Bezos.... Additionally, it seems likey that a lot of the early attention for Rivian was due to the fact that Bezos spoke positively of the company and put big money where his mouth was.

All that money made it possible for Rivian get to where it is now. Without Bezos and the aura that comes with his support, would Rivian be anywhere near as close to delivering R1s as it is?

I'm as eager as anyone to get an R1. I hate the thought of vans taking priority over my R1S. But I don't know the facts. I do believe Scaringe is doing what he thinks will get the most R1s to the most customers in the least amount of time while still keeping Rivian strong.

Original Bloomberg article
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DB-EV

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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.
I agree with all this, and personally feel the same way, but I was trying to answer objectively. : )
 

SANZC02

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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.
The Amazon order is subject to change but currently they do not plan on 10K a year but 100K by 2025. This is pulled directly from their S1 document

" Our commercial vehicles will initially consist of EDVs, and we plan to deliver 100,000 EDVs to Amazon by 2025. "
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.
I think you are under valuing the commercial van market. There are over 300k commercial vans sold annually. No one makes an electric van, if Rivian could cash in on that market as well as the plans for the private sector it would broaden their base and help them grow.

If you really want to help get ICE vehicles off the road, this is a key market. Especially when a lot of places like California trying to regulate those vehicles out of the market.
 

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jjswan33

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I think you are under valuing the commercial van market. There are over 300k commercial vans sold annually. No one makes an electric van, if Rivian could cash in on that market as well as the plans for the private sector it would broaden their base and help them grow.
Actually both Ford has an E-Transit:

https://www.ford.com/commercial-trucks/e-transit/2022/

and Ram has a ProMaster EV coming with the 2023 model year and they already sell a Ducato EV in Europe:

https://www.motor1.com/news/528432/2022-ram-promaster-specs-photos/

Both of these will have similar capabilities to the Rivian van, at least from a range/cargo prospective.

I believe that UPS and FedEx have contacts to build EV vans with someone as well but I have read less about those.

That said I agree with your point. The EV van market is potentially lucrative.

Bottom line though I think all this debate about where to focus is misguided. They should have separate teams for multiple projects all working simultaneously. If they focus all there effort on only part of the addressable market they will leave market for competitors.
 

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To me, the longer wait may mean newer technology, so I’m not bummed out. My Tesla Model 3 can keep me going until my refreshed Model S is delivered by (hopefully) May, 2022. Then, perhaps in time for the Winter of 2022 my R1T will be delivered. With both companies I look forward to continuing improvements in batteries, software, and more charging stations and more sales/service locations as time marches on - so except for those who need a vehicle NOW, I don’t see much of a downside.
 

dleewla

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Well crap, if Bezos tweeted “where are our vans?” Then RJ probably pivoted real quick. No surprise if they shift their focus to the commercial vans. I don’t like it but I get it.
 

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Would Tesla be what they are today if they focused on Semi Trucks?
I believe the Amazon deal is a huge positive and worth it for US even if it causes a delay of consumer deliveries.

* The influx of capital means we get our cars way earlier than if Rivian had to trudge along on their own.

* Amazon logs millions of miles. Presumably all the driving data becomes available to Rivian for improving their driver+ and even self-driving capabilities.

* The security of manufacturing vehicles they KNOW will be paid for is way higher than building cars for cancelable orders.

* To the extent components are shared between the vans and the R1T/R1S should give Rivian excellent economies of scale in cost and production systems that they wouldn't get with consumer orders only.
 

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Timing is extremely important and something that's extremely hard to contextualize let alone quantify.

Amazon getting electric delivery vans isn't going to change their business trajectory much, while Rivian not building R1T's and getting them into public hands ASAP could very well be a problem early on (F-150 and Silverado EV's coming).

And as so well pointed out before, Volvo trucks don't sell Volvo cars... Maybe some technology does cross the segment barrier, but Rivian building Amazon's vans thinking "this pays the bills" (I get it), but again they're not selling R1T's and that doesn't help the brand.

Tesla made great EV's. They leveraged their brand based on the demand for their product. Tesla did this multiple times raising share offer equity, but they did this because they made awesome EV's. They weren't indebted to build anything for anyone, they were just obligated to make people money who believed in their product and invested, which allowed to build more Tesla's.

Rivian is indebted to Amazon and when you deal with Amazon, that means you work for them, and that's when Jeff says "Hey RJ where's my vans".

There's a big difference between leveraging your product line to gain money to further expand versus having to obligate yourself to create other products (which take time, effort, energy, resources, etc.) all the while trying to expand your brand.

I just feel like Rivian could spread themselves too thin and miss the opportunity to seize market share and spark that fire that will ultimately lead to brand identification, recognition, and ultimately consumer desire for their products.

In order to leverage the brand, you have to have a brand, and that's why I say Volvo trucks don't sell Volvo cars, because they don't build up the Volvo brand.

I absolutely know Rivian has a great product, but I'm still blown away by how few people have heard about their trucks, and haven't any clue about the brand.
 
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Kaprice

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In order to leverage the brand, you have to have a brand, and that's why I say Volvo trucks don't sell Volvo cars, because they don't build up the Volvo brand.
I'm not an avid car buyer. I don't follow much car news. I was recently excited about getting a Telluride but am now excited about getting a Rivian.

And I'm being honest when I say that the Amazon deal built credibility and confidence in Rivian in my mind. I normally dismiss car startups because I doubt their ability to get off the ground. Amazon's purchase and deal alleviated a lot of those concerns for me.

Once Amazon starts delivering packages in Rivian vans, they're going to be driven millions of miles in harsh conditions. We'll start hearing how well (or not) the Rivian vans perform.

I doubt many people know anything about who's driving Volvo commercial trucks, but a LOT of normal people are going to know that Amazon is using Rivian vans. That's going to be huge.

Also, I'd expect Rivians Driver+ team will gain access to a lot of the driving data by Amazon, giving them a huge asset in improving assisted and eventually self driving.
 

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Aren't they Jassy's vans now?
 

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I don’t think time to market is nearly as key as everyone thinks with the R1 series. Sure first mover advantage is nice, but it they ship a product that has problems and a limited service infrastructure then their brand will become “that startup that makes a cool product that breaks and that you can’t get service on”.

The adventure vehicle/ pickup / large SUV markets are huge. There are more than enough sales to go around. Just look at the number of preorders for non existent products. Rivian needs to be seen as an exciting vehicle that is a pleasure to own. This, way more than Amazon’s influence, is the cause of all delays. All of the test drives and events talked about minor problems. But they are minor problems that will drive customers nuts. Laggy software? When the touchscreen is needed to do everything this will drive you nuts every time you get in your car. Can’t use the power tonneau without it breaking AND the nearest service center is 100 miles away? Well that is a tweet they don’t want to make the rounds.

I fully understand people’s frustration with the lack of communication but slow going makes sense here. Distribution to a forgiving audience (employees and maybe some beta Amazon trucks that can fallback on their ICE cars if there are problems) just makes sense.
People keep seeing this conspiracy and assume the options are delivery vans or R1s. In reality the choice is rush deliveries before you are sure of quality or move slow to not ruin your first impression.
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