You may have noticed cool-looking blue delivery vans with a squiggly light bar making the rounds in your neighborhood lately. These are Rivian‘s new electric delivery vehicles helping Amazon enable greener package delivery. I thought we could take a deeper look at who Rivian is, key details on these innovative electric vans, how Amazon is putting them into service already, and what it means for Rivian‘s future as an EV company.
A Quick Introduction to Rivian
Before diving into the vans themselves, let me give you some background on Rivian as a young automaker…
Rivian was founded in 2009 by CEO RJ Scaringe as Mainstream Motors, focusing on fuel efficiency. After developing some electric sportscar prototypes, the company changed names to Rivian in 2011 when Scaringe realized electrification was the future.
Key funding rounds totaling $8 billion included investments from Amazon ($700 million), Ford ($500 million) and others. This influx of capital enabled Rivian to design three groundbreaking electric vehicles from scratch – the R1T pickup, R1S SUV, and electric delivery van.
Here is a brief overview of Rivian as it works to establish itself as a competitive producer of premium electric trucks, SUVs and commercial vehicles:
Headquarters: Plymouth, Michigan \
Leadership: RJ Scaringe, CEO; Mike Bell, SVP Technology \
Manufacturing: Normal, Illinois plant, planned Georgia facility \
Models: R1T pickup, R1S SUV, Electric Delivery Van \
Production Started: September 2021
Now let‘s see what Rivian packed into these futuristic electric vans…
Rivian‘s Electric Delivery Van Models and Specs
Rivian produces their electric delivery van (EDV) in two sizes – the medium-duty EDV500 and larger EDV700. Customizable to an extent, they offer fleet owners flexibility in configuring for maneuverability or max cargo volume depending on needs.
Here is a specs comparison I put together between the variants:
| Spec | EDV500 | EDV700 |
|---|---|---|
| Cargo Volume | 500 ft^3 | 700 ft^3 |
| Payload | Up to 1,960 lbs | Up to 2,750 lbs |
| Range | 150 mi | 150 mi |
| Charging | 150 kW | 150 kW |
| Turning Radius | ~55 ft | ~55 ft |
| Height | 6‘ 5" | 6‘ 2" |
| Length | 16‘ 2" | 19‘ 2" |
Both models feature Rivian‘s specialized electric motors and battery pack integrated into a unique platform the company calls RCV – Rivian Commercial Van. This architecture was designed from day one for the rigors and demands of commercial use rather than later adapting their consumer SUV platform.
Let‘s look under the hood…
Drivetrain: To deliver brisk acceleration plus energy efficiency for a delivery vehicle that‘s starting and stopping constantly, Rivian uses a custom-designed quad motor system powering the front and rear axles. This allows precise torque control at all four wheels for stability in slippery conditions with heavy loads.
Cleverly, the battery modules making up the pack are incorporated into the body as structural elements adding stiffness. The low center of gravity conferred by the underfloor battery placement also aids handling.
Comfort: Rivian focused extensively on ergonomics and interior appointments for a driver‘s workspace that enables alertness over long shifts. Key features include adjustable seat/steering column, expansive visibility, automatic door assist for the cargo bulkhead, precisely positioned control switches and more. Little things add up in reducing fatigue over hundreds of miles.
By using Rivian‘s purpose-built electric motors and battery setup instead of trying to retrofit a traditional combustion chassis, the company engineered maximum interior volume configurable to each customer‘s cargo needs down to the inch. Now let‘s see how it operates in practice with Amazon‘s fleet…
Amazon‘s Coast-to-Coast Rivian Fleet Grows Daily
Rivian currently counts e-commerce giant Amazon as its sole electric delivery van customer, but what a major customer it is! You may have already seen the EDVs rolling out packages in Seattle, San Francisco, Los Angeles or dozens of other cities.
Per Rivian‘s November 8th press release, the Amazon vans have driven over 5 million miles hauling freight across 27 metropolitan regions. Feedback from drivers highlights smart functionality incorporated by Rivian like the automatically retracting bulkhead divider doors activated by the vehicle‘s central locking system.
"It‘s amazing not having to get out and open and close those doors between the cab and cargo area manually – that adds up to significant time savings," said one driver based in Phoenix.
By collaborating closely with Amazon‘s logistics executives on optimal cargo bay layout and vehicle dimensions for neighborhood deliveries, Rivian helped enable packages to often be loaded in sequence of upcoming stops. This allows drivers to grab the next drop quickly. The extra large driver-side door opening nearly 90 degrees further aids accessibility.
Over 1,000 EDVs were operational by mid-November. Rivian plans to deliver thousands more over the coming months, solidifying Amazon‘s position as the clear leader in green last-mile delivery at scale.
Amazon invested in Rivian years prior to vehicle production, ordering 100,000 vans for its fleet. While it will take through 2030 to fully deliver that volume, the partnership propelled Rivian‘s early manufacturing expansion while guaranteeing a flagship buyer for the innovative EDVs.
Now let‘s discuss an important recent speedbump in Rivian‘s broader growth trajectory…
Mercedes Partnership Dissolution Leaves Europe on Hold
News broke in early September 2022 that Rivian and Mercedes-Benz planned to partner on electric commercial vans in Europe, sending Rivian stock up 11%. But by early December, Rivian announced that joint van production was now paused as the company focuses more on its existing facilities and R1 platform ramp.
This canceled the automakers‘ joint venture which would have seen Rivian Access and Mercedes Vans models built in a dedicated EV factory. So what happened?
Public statements were vague, but reading between the lines it seems that as Rivian‘s leadership took a harder look at demands of scaling production simultaneously in both the U.S. and Europe, existing bandwidth constraints outweighed the longer-term market expansion opportunity.
This chart shows Rivian‘s tremendous production ramp in recent quarters, but also continued high operating losses:
The breakup with Mercedes was likely a strategic choice to devote maximal resources stateside where Rivian can currently realize higher margins on vehicles like the $70,000+ R1S SUV versus thinner margins exporting abroad.
Does this cancellation suggest Rivian won‘t ever expand into Europe? No guarantees, but once manufacturing stabilizes and costs decrease, that huge additional addressable market with supportive EV regulations retains appeal if scaled responsibly.
In the meantime, fulfilling Amazon‘s ambitious 100,000 unit electric delivery van order in America alone over this decade keeps Rivian‘s factory floors busy.
Speaking of financials, can these innovative electric vans help Rivian turn the corner into profitability?
The Road to Profitability: Can Rivian‘s Vans Help?
I think most industry watchers recognize Rivian has created some of the most compelling electric trucks and fleet vehicles yet available from a pure technology perspective. Early demand appears to validate that.
However, it faces the same tough scaling challenges confronting any aspiring auto manufacturer. Producing vehicles is extremely capital intensive, requiring immense initial factory investments. The cash burn is therefore massive heading into mass production before revenue fully catches up.
Recent unpredictability in battery metals pricing and continued supply chain knots make budgeting tougher too. These cost inflation headwinds have multiple automakers reeling.
So where does Rivian stand on profitability?
With its R1 vehicles just rolling out to customers now, near-term losses are expected as part of the expansion cycle. Bulls see tremendous medium and long-term potential. But a lot still has to go right executing such rapid production growth for the 100,000+ preorder backlogs while contracts like Amazon‘s phase in.
Critically, the Amazon vans and follow-on commercial vehicle contracts have better margin potential than Rivian‘s light-duty consumer models. Fleet operators focus more on total lifecycle costs than initial sticker prices. This gives Rivian pricing power to pass higher materials expenses on to commercial buyers over time in a way not possible on mass-market vehicles targeting average consumers.
In summary, here is how I view Rivian‘s profitability outlook:
Risks:
- Continued high production costs
- Potential economic slowdown hurting sales
- Unpredictable supplier and materials expenses
Positives:
- Strong early demand signals product-market fit
- Amazon van volumes ramping now
- Higher margins selling to commercial fleets
On balance, I remain optimistic on Rivan‘s long-term profit outlook due to excellent product quality and smart segmentation between commercial trucks and consumer models. But make no mistake – the next year or two remain a high-stakes scaling challenge. Wish them luck!
In Conclusion
I hope you enjoyed exploring Rivian‘s electric delivery van technology and business landscape with me! It‘s an exciting company to watch that has made brilliant vehicles so far. Between the R1 trucks/SUVs and fleet vehicles, Rivian is pushing the industry forward.
It has to prove it can manufacture quality EVs at scale profitably now. Securing and satisfying customers like Amazon enables that ramp-up operational experience.
I‘m bullish on Rivian emerging as a leader in sustainable last-mile delivery. The early win with Amazon‘s contract is just the beginning. Exciting times ahead!
Let me know if you have any other questions on Rivian, its unique electric vans or the promising commercial EV space in general.
