Rivian Opens Up Commercial Van Orders, Expanding EV Market

Introduction

Rivian (RIVN) has announced the expansion of orders for its Rivian Commercial van, targeting fleet operators and expanding its reach in the electric vehicle (EV) market.

Rivian's Commercial Van

The commercial van is built on the same platform as Rivian's electric delivery van currently produced for Amazon (AMZN). It comes in two sizes, the 500 and 700, with varying cargo space and payload capacities. The vans start at $79,900 and $83,900, respectively.

Market Opportunity

The commercial delivery van market is substantial, with Mercedes Sprinter and Ford Transit vans dominating the industry. Both companies offer electric versions, recognizing the growing demand for electric vehicles for short-haul deliveries and local distribution.

According to Global Market Insights, the commercial van market is projected to reach $210.3 billion by 2034, with an annual growth rate of 6.7%. The electrified commercial van segment is estimated to account for $50 billion by 2034.

Rivian's Strategy

Rivian's entry into the broader commercial van market signifies a shift in its strategy. After an initial exclusive partnership with Amazon to produce 100,000 vans, Rivian is now seeking opportunities with other fleet operators.

Analyst Dan Ives of Wedbush views this move as "a big step in the right direction" and believes it "expands Rivian's opportunity on the commercial EV front."

Growth Drivers

The growth of e-commerce and the need for last-mile fulfillment are driving demand for commercial vans. The global e-commerce delivery market is projected to exceed $1.58 trillion by 2034.

Electric vans are particularly suited for last-mile delivery due to their low operating costs and ability to navigate urban environments effectively.

Outlook

Rivian's commercial van expansion opens up new revenue streams for the company. As the demand for electric commercial vans continues to rise, Rivian is well-positioned to gain significant market share. Investors will closely monitor the company's fourth-quarter earnings report on February 20th for insights into its commercial unit and overall business performance.