Rivian Opens Up Commercial Van Orders, Expanding EV Business

Rivian (RIVN) announced plans to open up orders for its Rivian Commercial Van beyond its initial launch partners, which include Amazon (AMZN) and AT&T. This move has the potential to unlock a lucrative revenue stream for the EV maker.

Commercial Van Specifications:

The Rivian Commercial Van is available in two sizes: the 500 and 700. The smaller 500 offers a higher payload capacity (2,663 lbs) but less cargo space (487 cubic feet), while the 700 boasts a larger cargo capacity (652 cubic feet) with a slightly lower payload (2,258 lbs). Both models start at $79,900 and $83,900, respectively.

Market Opportunity:

The commercial delivery van industry is a significant one, with Mercedes Sprinter and Ford Transit vans holding dominant market shares. Both companies offer electric versions of their vans, indicating a growing demand for EVs in shorter journey and local delivery applications. In 2024, Ford reported a 64% increase in E-Transit sales, contributing to the growth of its Ford Pro commercial unit.

Global Outlook:

According to Global Market Insights, the global commercial van market is projected to nearly double in value over the next decade, reaching $210.3 billion by 2034, with a compound annual growth rate (CAGR) of 6.7%. The electrified commercial van segment is expected to account for around $50 billion of this market by 2034.

Growth Drivers:

The increasing popularity of e-commerce and last-mile fulfillment services is driving the demand for commercial vans. In 2024, the global e-commerce delivery market was valued at $426.2 billion, and it is expected to grow to around $1.58 trillion by 2034, with a CAGR of 14%.

Outlook for Rivian:

Rivian, Ford, Mercedes, and other companies see the commercial van market as a major opportunity, particularly in the electric vehicle segment. Analysts believe that Rivian's announcement indicates an easing of production constraints, which had previously limited its output. Investors will be watching closely for updates on Rivian's commercial van business, which it will provide when it releases its fourth-quarter earnings on February 20th.