Rivian Expands Commercial Van Orders, Signaling Growth Potential
Rivian (RIVN) has announced the opening of orders for its commercial van beyond its initial launch partners, paving the way for a potentially lucrative segment for the pure-play EV maker.
Amazon Partnership and Market Landscape
Rivian's commercial van is built on the same platform as the electric delivery van produced for Amazon (AMZN). While Amazon initially reserved an exclusive order of 100,000 vans, it currently operates only 20,000. Following the exclusivity period, Rivian has tested its vans with fleet operators, including AT&T, and is now offering them to a wider customer base. Shares of RIVN rose over 3% on Monday.
The commercial delivery van market is a significant sector, dominated by Mercedes Sprinter and Ford Transit vans. Both competitors offer electric versions, with growing demand for shorter journeys and local deliveries. Ford's E-Transit sales surged 64% in 2024, contributing to its Ford Pro commercial unit's growth.
Mercedes recently launched its eSprinter van in the US, but electric commercial van sales have been slower. Global Market Insights projects the commercial van industry to nearly double globally by 2034, with a 6.7% CAGR.
Electrification and E-Commerce Logistics
The rise of e-commerce logistics and last-mile fulfillment has driven demand for commercial vans. Amazon, Alibaba, Walmart+, and others have fueled the growth of this sector. GMI estimates the total global e-commerce delivery market at $426.2 billion in 2024, with a projected CAGR of 14% through 2034.
EVs offer an ideal solution for last-mile delivery, aligning with the "duty cycle" of these vehicles, as noted by Ford CEO Jim Farley. Electric vans can provide cost savings compared to combustion engines for short-distance operations.
Rivian's Commercial Van Outlook
Rivian has received interest from non-Amazon customers, including AT&T. Analyst Garrett Nelson believes the announcement indicates easing production constraints related to parts shortages. Rivian is set to provide an update on its commercial unit during its fourth-quarter earnings release on February 20.