Rivian Expands Commercial Van Orders, Targeting $210B Market
Rivian Opens Up Commercial Van Orders to Fleet Operators
Rivian Automotive (RIVN) has announced that it is extending orders for its Rivian Commercial Van beyond its initial launch partners. This move is expected to open up a lucrative market for the pure-play electric vehicle (EV) manufacturer. The commercial van is built on the same platform as the current electric delivery van that Rivian produces for Amazon (AMZN).
Amazon Exclusivity Ends, Rivian Tests with Large Fleet Operators
Rivian initially had an exclusive arrangement to produce 100,000 vans for Amazon. However, Amazon is currently using only 20,000 vans. Following the end of this exclusivity period, Rivian has been testing its commercial vans with large fleet operators, including AT&T. The company is now ready to open up orders to other fleet-utilizing businesses.
Commercial Van Specifications and Pricing
The Rivian Commercial Van comes in two sizes: the 500 and 700. The 500 offers a higher payload capacity (2,663 lbs) but lower cargo space (487 cubic feet), while the 700 has lower payload (2,258 lbs) but higher cargo space (652 cubic feet). The vans start at $79,900 and $83,900, respectively.
Analysts Praise Rivian's Strategic Move
Analysts have praised Rivian's decision to expand its commercial van offerings. Wedbush analyst Dan Ives called it "a big step in the right direction" and a "smart move at the right time." The commercial delivery van business is dominated by companies like Mercedes Sprinter and Ford Transit, which offer both electric and combustion-powered options.
Growing Commercial Van Market and EV Penetration
The global commercial van market is projected to grow significantly over the next decade, with a projected compound annual growth rate (CAGR) of 6.7%. The electrified commercial van segment is expected to capture a significant portion of this growth, reaching $50 billion by 2034.
Rivian Competes for E-Commerce and Last-Mile Delivery Market
Rivian, Ford, Mercedes, and others are eyeing the growing e-commerce and last-mile delivery market as a key opportunity for their van offerings. Electric vans offer a cost-effective and environmentally friendly solution for short-distance deliveries.
Rivian Earnings Update on Commercial Unit
Investors will be keen to hear more about Rivian's commercial van business when the company releases its fourth-quarter earnings on February 20th after the market close.