Rivian Expands Fleet Business Beyond Amazon

The electric vehicle manufacturer, Rivian, is broadening its commercial operations, extending beyond its initial focus on serving exclusively as a supplier for Amazon.

New Fleet Ordering Options

According to a recent update to Rivian’s website, the company will begin accepting orders for its electric delivery vans in 2022. Deliveries to these new customers are anticipated to commence in early 2023.

Rivian is currently fulfilling a substantial contract to produce 100,000 electric delivery vehicles for Amazon by the year 2024. Initial documentation related to the company’s public offering suggested this arrangement was exclusive.

However, the newly released information indicating sales to other fleet operators before 2024 implies a degree of flexibility within the Amazon contract.

Requests for clarification regarding the exclusivity terms, directed to both Amazon and Rivian, have not yet received a response.

Expanding Vehicle Offerings

Rivian’s website now features a dedicated section detailing fleet options. Customers will be able to utilize an online configurator to plan and submit fleet orders starting in early next year.

Beyond the delivery vans, Rivian will also offer fleet versions of its R1T electric pickup truck and R1S electric SUV. This expands the company’s potential customer base beyond individual adventure-seeking consumers.

This strategic move positions Rivian in more direct competition with Ford’s all-electric pickup, which is specifically targeted towards commercial applications.

Fleet Management and Infrastructure

The updated website also highlights additional fleet-related offerings, including FleetOS, a comprehensive management platform, and solutions for charging infrastructure.

Both Rivian and Amazon are poised to benefit from a broader reach within the commercial vehicle market.

Rivian’s S-1 filing emphasizes the importance of customer acquisition for achieving profitability: “The success of our business depends on attracting and retaining a large number of customers.”

Production Capacity and Challenges

Despite the expansion, questions remain regarding Rivian’s ability to accommodate a significant increase in demand.

The company’s manufacturing facility in Normal, Illinois, currently has a production capacity of up to 150,000 vehicles per year. This is allocated between approximately 65,000 R1 pickup and SUV models and 85,000 commercial delivery vans (RCV).

Rivian anticipates fulfilling a backlog of roughly 55,400 R1 vehicle preorders by the end of 2023, as stated in an amendment to its S-1 filing.

IPO and Investor Sentiment

This expansion into the fleet business occurs shortly before Rivian’s initial public offering (IPO). The company’s valuation is projected to reach as high as $65 billion.

However, some investors have expressed reservations. A recent report from New Constructs, an investment research firm, suggests that Rivian’s stock is overvalued and advises against purchasing shares during the IPO.

The report highlights Rivian’s limited vehicle production and the competitive landscape, which includes established automakers like General Motors and BMW.

Despite these concerns, many investors remain optimistic about Rivian’s future prospects. This latest development could potentially sway skeptical investors, demonstrating the company’s adaptability and potential for growth.