Rivian Expands Commercial Van Orders, Targeting Fleet Operators
Key Points:
* Rivian (RIVN) opens up orders for its Rivian Commercial van beyond initial launch partners.
* The van operates on the same platform as the Amazon (AMZN) electric delivery van.
* Rivian plans to tap into the growing commercial delivery van market, dominated by Ford Transit and Mercedes Sprinter vans.
* The e-commerce logistics industry is expected to drive demand for electrified commercial vans.
* Rivian shares rose over 3% on the announcement.
Rivian Automotive (RIVN) announced on Monday that it is opening up orders for its Rivian Commercial van beyond its initial launch partners, including Amazon (AMZN). This move has the potential to create a lucrative new business line for the pure-play EV maker.
The Rivian Commercial van shares the same platform as the electric delivery van that Rivian currently produces for Amazon. While Rivian initially had an exclusive agreement to produce 100,000 vans for Amazon, the retail giant is currently only using 20,000.
Following the expiration of its exclusivity period with Amazon, Rivian has been testing its commercial vans with large fleet operators, such as AT&T. The company is now ready to accept orders from other businesses utilizing fleets.
The Rivian Commercial vans are available in two sizes: the 500 and the 700. The smaller 500 model offers a higher payload capacity (2,663 lbs) but less cargo space (487 cubic feet) compared to the larger 700 model (2,258 lbs, 652 cubic feet). The 500 and 700 vans are priced at $79,900 and $83,900, respectively.
"This is a big step in the right direction for Rivian as the Amazon relationship has evolved," said Wedbush analyst Dan Ives. "It expands Rivian's opportunity on the commercial EV front."
The commercial delivery van market is a substantial industry, with Mercedes Sprinter and Ford Transit vans holding a significant market share. Both companies also offer electric versions of their delivery vans, catering to the growing demand for shorter journeys and local deliveries.
Ford reported a significant increase in its E-Transit sales in the US, jumping by 64% to 12,610 units in 2024. The growth helped boost its Ford Pro commercial unit, which sold around 150,000 commercial vans in the US last year.
Mercedes recently began selling its eSprinter van in the US in Q4, with sales totaling 828 units. However, the company sold a total of 49,500 commercial vans in the US in 2024.
According to Global Market Insights, the global commercial van market is projected to nearly double over the next decade, from $109.4 billion in 2024 to $210.3 billion by 2034, with a 6.7% compound annual growth rate (CAGR). The firm predicts that the electrified commercial van segment will account for around $50 billion of that market by 2034.
The growing e-commerce logistics and last-mile fulfillment industry is expected to fuel demand for commercial vans, particularly electric models that align with the duty cycle of last-mile delivery.
"We think that the pure EV industry is going to start to circle in on the duty cycle that makes most sense for that customer," said Ford CEO Jim Farley. "Frankly, it's cheaper to operate the vehicles in electric than a combustion powertrain."
Investors will be keen to hear more about Rivian's commercial van business during its upcoming fourth-quarter earnings call scheduled for Thursday, February 20.