The electric automaker Rivian earned a lot of good press, consumer curiosity, and even a few jaw-drops this week as its pickup and SUV were finally revealed at the LA Auto Show.
But will those translate into sales?
That’s the $69,000+ question for the Bloomington-Normal economy, where leaders hope the EV startup will deliver the hundreds of jobs it promised in exchange for the tax breaks it received to buy the former Mitsubishi Motors plant.
GLT wandered around the LA Auto Show asking EV industry experts what they think of Rivian’s vehicles and chances. The consensus: They’re pricey but very impressive.
“Generally speaking, people are really excited. They’re getting a lot of good press,” said Chelsea Sexton, a well-known EV industry watcher based in LA. “To the extent there are any concerns, obviously price is going to be one of them.”
The SUV starts at $72,500, the pickup at $69,000. But it’s the more expensive versions—with bigger battery packs—that will be produced first in 2020. Those prices are not yet announced, but speculation is that it could near $90,000.
— Fred Lambert (@FredericLambert) November 26, 2018
Rivian founder and CEO RJ Scaringe said previously that the high level of connectivity and features necessitate such a price tag. There are cheaper EVs—the Chevy Bolt EV starts at $37,495, the Nissan Leaf at $29,990—but they don’t have the same functionality as Rivian’s vehicles. Rivian wants to be aspirational, Scaringe said.
“Those other (cheaper) EVs have probably pushed up against a technical boundary because the price point is just not there,” Scaringe said.
Rivian’s extensive media coverage was spattered with comparisons to Tesla—the most prominent EV company in the U.S. and the first to mainstream the technology.
Gali Russell is a retail investor in Tesla and self-described “finance nerd” who runs the YouTube channel HyperChange. The New Yorker arrived Monday at the LA Auto Show.
“I feel like I’m always a little bit skeptical of EV startups because we’ve seen so many come and go,” Russell said. “But Rivian seems to be taking it a lot more seriously than other companies. Just from looking at their car, the specs and design are really impressive. It’s the first electric vehicle besides a Tesla that I personally am getting excited about and might want to own. I think there’s something there.”
Rivian’s vehicle specs also impressed Sean Mitchell, a Tesla owner who runs the Tesla club in Denver. He follows the EV industry closely on his YouTube channel.
Rivian would be the first EV maker to achieve over 400 miles on a single charge, he said. By the time Rivian hits the market in 2020, other companies could catch up, he added.
“Specifically Tesla. I would not be surprised if we start seeing some (Tesla) vehicles that are 400+ miles. But that’s really, really noteworthy for Rivian,” he said.
Rivian’s launch with a pickup and SUV takes advantage of a larger shift in the U.S. auto industry away from smaller sedans. Two-thirds of all U.S. auto sales are now trucks and SUVs, but there is no all-electric pickup currently on the market.
“Certainly larger trucks and crossovers and SUVs are something that the EV-wanting public has been clamoring for for a while,” Sexton said.
Russell said his No. 1 concern about Rivian is if Tesla follows through on its own plans to release an EV pickup—going “head to head” with a brand so closely tied to EV culture. That could be announced even before Rivians hit the streets, he said.
But Russell also said there might be room for everyone. A survey released earlier this year by AAA showed that 20 percent (or 50 million Americans) will likely go electric for their next vehicle purchase, up from 15 percent in 2017.
“So even if Tesla expands its capacity and all these other startups expand their capacity too, we’re still not really meeting the pent-up demand for electric vehicles. Companies like Rivian have a lot of opportunity and justification to make that investment because we need to scale production to millions of cars per year. And even Tesla is only at like 300,000 cars per year now,” Russell told GLT.
Rivian didn’t release the number of pre-orders (with $1,000 deposit) it received Monday and Tuesday as the R1T pickup and R1S SUV opened for business. When asked about preorders, Scaringe said only it was a “remarkable number of people.”
“We’re seeing a lot of excitement. What we’re seeing is all the things we’ve been researching and feeling in our hearts ourselves about the excitement around a vehicle that can get dirty, go off road, be very comfortable on road, still great performance, and doing all of that efficiently. We’ve had incredible reaction. It’s been a lot of fun talking to customers over the last two years, having been quiet for so long.”
He added: “These first customers are great for building relationships and understanding how they think about the product and using them as a bit of a feedback loop.”
A few days of good press won’t guarantee success. EV startups are known for fizzling. Even Tesla has struggled to stay capitalized and with its supply chain.
Tesla founder Elon Musk recently disclosed that difficulties ramping up production of his third vehicle, called the Model 3, nearly put the company out of business. Mitchell said it’s possible Rivian too might encounter production problems later in the process—perhaps after 2022 when it’s promised to launch additional vehicles.
Mitchell noted Rivian appears to have an extensive lineup of auto industry veterans on its engineering and manufacturing teams. Rivian also plans to use the same underlying base technology—called the “skateboard”—on all of its vehicles.
“Maybe they’ll save themselves from some of that frustration, but that to me will be really interesting to see, knowing how much Tesla has struggled with production of their vehicles,” said Mitchell, who Rivian interviewed during its customer-research phase.
Even after production, the work isn’t over, Sexton said.
Startups have struggled to build dealership and service networks to sell and repair their vehicles, she said. For established automakers like Ford and GM, those networks already exist, and private mechanics are accustomed to working on those cars.
“Engineering a good EV is not that hard, or at least it’s not unheard of,” Sexton said. “Almost every single startup without fail underestimates the degree of challenge (in deployment), and the amount of time it takes.”
Scaringe acknowledged the issue during a recent media visit to his design and engineering hub outside Detroit. Rivian plans to have “service agents waiting for the first vehicle to get into a fender-bender or get a broken window from a surfboard being loaded in.”
“That system will be built and that will carry some cost (up front). As part of that, we’re establishing some partnerships to support that ramp-up of service infrastructure,” he said.
He declined to detail those partnerships.
Rivian did receive a shoutout from a surprising source Tuesday: Bollinger Motors. That’s another young EV company also planning to produce a pickup truck.
“Great job today @Rivian,” Bollinger tweeted.
— Bollinger Motors (@bollingermotors) November 28, 2018
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