Rivian Opens Commercial Van Orders Beyond Initial Partners
Rivian (RIVN) announced the expansion of its commercial van orders beyond its exclusive launch partners. This move opens up a significant business opportunity for the electric vehicle (EV) manufacturer.
Rivian's commercial vans utilize the same platform as the electric delivery vans it produces for Amazon (AMZN). While Rivian initially had an exclusive agreement to produce 100,000 vans for Amazon, Amazon currently uses only 20,000 vehicles.
Following the expiration of its exclusivity with Amazon, Rivian has tested its commercial vans with major fleet operators like AT&T. The company is now ready to accept orders from other organizations utilizing fleets.
Rivian's commercial vans come in two sizes: the 500 and 700. The 500 offers a higher payload capacity (2,663 lbs) but less cargo space (487 cubic feet), while the 700 has a lower payload capacity (2,258 lbs) and more cargo space (652 cubic feet). The vans start at $79,900 and $83,900, respectively.
Industry analysts believe this move is a positive step for Rivian, expanding its opportunities in the commercial EV sector. The commercial delivery van business is substantial, dominated by Mercedes Sprinter and Ford Transit vans. Both companies offer electric versions of their vans, catering to the growing demand for EVs for shorter journeys and local deliveries.
The commercial van industry is projected to nearly double in value globally over the next decade, from $109.4 billion in 2024 to $210.3 billion by 2034, with a 6.7% CAGR. The electrified commercial van segment is expected to account for around $50 billion of this market by 2034.
With the rise of e-commerce and last-mile fulfillment, the commercial van market is poised for significant growth. Rivian, Ford, Mercedes, and others recognize this opportunity and view electric vans as a solution that aligns with last-mile delivery duty cycles.
Investors should anticipate further updates on Rivian's commercial van business when it releases its fourth quarter earnings on Thursday, February 20.