Rivian’s Allocation; Complex or Out of Control?

[kurtlikevonnegut]

I'd love to get the zip codes of everyone who has received theirs and map them. I would bet they are trying to spread them out around all service centers to prevent overloading a few of them.

I do think this is a factor. If I had to guess, I think they have a support threshold for specific regions based on staffing levels and facilities available that is dictating how many vehicles are sent to those service areas. This would explain why some locations appear to be delivery hotspots while others have a much lower volume of delivery. Hopefully the updated windows will account for that as well.

Regardless, I would not have any expectations for a delivery timeline outside of a vague 6 month window until the updates are sent. Having any sort of expectations at this point is just setting yourself up for more disappointment.

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[EVTrucking]

I wonder if there is another factor involved: proximity to other open reservations. I have t seen this discussed before but I may have missed something. I only mention this because of the problem created by the reallocation of a vehicle if the original reservation-holder doesn’t complete delivery of the vehicle for any reason. I don’t know how often this happens, but I suspect that it is easier and a lot cheaper for Rivian to contact another reservation holder in close proximity should the first match not work out for any reason. These aren’t widgets boxed up in protective packaging which UPS can pickup and return to the manufacturer easily, quickly, and at relatively low cost. When I see reports of damage from transportation I have to think that Rivian doesn’t want to risk another move if they can avoid it.

As an example, if they get an R1T to the Bay Area and the deal falls apart there is a near-certainty that they can find another customer to accept delivery no matter what the configuration is. On the other hand, if the same vehicle is in Billings, Montana then what are the odds that they’ll find a match there? No match means they have to arrange and pay for transportation to another physical location.

With that in mind, it probably makes sense for them from a business perspective to deliver the most vehicles to the areas with the most demand by reservation holders first, especially while their processes are being refined. I think this probably correlates to SC locations, but I’m not sure that’s always the case.

I cautiously disagree, I think from a business standpoint, especially in the early going, it would make more sense to get the vehicle to the next person in line even if it costs a bit more to ship the vehicle somewhere else. The number of times this would or does occur is very small so the overall bottom line cost is negligible.

 

[EVTrucking]

I think that there is a process that they are using to allocate vehicles, but I think they need to look at some of the recent outliers and try to understand and rectify why it is happening. It's obvious that some logic in their system is resulting in a random element that is not by design.

I do think that everyone needs to have the mindset that people with preorder dates after them will get a truck before them. The biggest issue to me is still communication and the lack of expectation setting that is being done to address this by Rivian. If they had released the updated delivery timeline functionality on the website "in early 2022" as originally promised, I don't think you'd have as much of an issue for most people. At this point, the delivery estimates that we all received at the end of 2021 are essentially worthless and the fact that we are all still waiting for the updated timeline is extremely disappointing.

Personally, I emailed Tony this morning explaining how disappointing it is that they keep making these unforced errors and recommend everyone in this situation do the same. He probably doesn't care about 5-10 emails, but he may care about 100+ reiterating the same point.

Email sent to Tony!

 

[Dark-Fx]

My pre order date is 3/21 for a Adventure/FG/Large/BM. Nearest SC is SLC 346 miles away. Current delivery window is July-September 2022. No contact yet.

Rivian’s stated allocation methodology is configuration/location/pre order date. I have no issue with that.

What bothers me is that folks with pre order dates in September and October 2021 are already driving their R1T. While folks with pre order dates in 2018, 2019, 2020 have not heard anything. I am specifically referring to folks that have the current available configurations.

I am and have been a strong supporter of Rivian but in this particular issue I think Rivian is out of control.

Whoever is doing the allocation at Rivian seems to not have customer satisfaction as part of there performance metric.

There can be no reasonable justification for someone with a pre order date in 2021 let alone 9/21 having a truck or an assigned guide at this point in time.

People that aren't close to a service center really should want to wait for their trucks, unless they want a paperweight that needs an expensive tow to a service area.

 

[Dark-Fx]

BTW I do not see how Tonneau cover selection would make any difference. That is an add on during the production process and not a parts supply issue.

You don't see how a part could cause a parts supply issue??

I cautiously disagree, I think from a business standpoint, especially in the early going, it would make more sense to get the vehicle to the next person in line even if it costs a bit more to ship the vehicle somewhere else. The number of times this would or does occur is very small so the overall bottom line cost is negligible.

In a world where the trucking industry isn't in disarray, this would still not make sense. Rivian shouldn't be shipping trucks back and forth across the country just because the person they built it for decided not to buy.

 

[sub]

It is not just cancellations. If a trailer holds 10 trucks, they are going to put 10 trucks on it if at all possible. It would be quite inefficient to only load 5 just because they only have 5 people with LE configurations that are currently buildable living in the destination city. If there are more recent buyers in destination city who have configured buildable trucks they are going to load them on the trailer too.

BTW I do not see how Tonneau cover selection would make any difference. That is an add on during the production process and not a parts supply issue.

Removing the power Tonneau certainly is a parts issue. And a design issue too.

Removing the power Tonneau cover requires a different tailgate/tonneau button module since they will need a version that has only one button and not two. They will also need a different trim for the front of the bed that does not have a big hole in it where the power tonneau was going to be.

While they will need those parts for the Explore version, Rivian was not planning to build Explores anytime soon. I would not be surprised if they have even finished designing the non-power-tonneau parts. Of course if this is the case, not sharing that info with preorderers who's configuration is being held up is not good customer service.

 

[EVTrucking]

It is not just cancellations. If a trailer holds 10 trucks, they are going to put 10 trucks on it if at all possible. It would be quite inefficient to only load 5 just because they only have 5 people with LE configurations that are currently buildable living in the destination city. If there are more recent buyers in destination city who have configured buildable trucks they are going to load them on the trailer too.


Removing the power Tonneau certainly is a parts issue. And a design issue too.

Removing the power Tonneau cover requires a different tailgate/tonneau button module since they will need a version that has only one button and not two. They will also need a different trim for the front of the bed that does not have a big hole in it where the power tonneau was going to be.

While they will need those parts for the Explore version, Rivian was not planning to build Explores anytime soon. I would not be surprised if they have even finished designing the non-power-tonneau parts. Of course if this is the case, not sharing that info with preorderers who's configuration is being held up is not good customer service.

I still disagree on the allocation being a function of carrier truck size or what ever. If that is the case then Rivian’s allocation is a who gives a shit! They should revise their criteria to Config/Location/Lottery. Let everyone know that pre order date is meaningless. We have 15k R1s to dole out this year and if you are lucky you might get one!! If not toughsky shitsky.

If Rivian was not parts supply limited and projecting 30-40k R1s for 2022 then allocation methodology would not be that crtical but only 15-16k R1s for 2022, so they need to get it right!!

Rivian promised a new (better) customer experience…..

 

[RBR1S]

I have to agree it's not a semitruck transport issue. I know plenty of people who would fly to Normal, IL - TODAY if they could drive it off the factory parking lot. *and yes there have been some that pick it up in Normal *


What's got me more than anything is they say they have delivered about 2000 R1T, but have made over 6000. Where are the 4000 sitting? Are they stuck post manufacturing QC? On transports? Sitting at the service centers waiting to be picked up?

 

[JGard18]

If a guide would even reach out to me, I would happily fly to Normal (from Boston) to pick up the truck and make that ~16 hour drive back. Doesn't seem like an option, though.

 

[EVTrucking]

I have to agree it's not a semitruck transport issue. I know plenty of people who would fly to Normal, IL - TODAY if they could drive it off the factory parking lot. *and yes there have been some that pick it up in Normal *


What's got me more than anything is they say they have delivered about 2000 R1T, but have made over 6000. Where are the 4000 sitting? Are they stuck post manufacturing QC? On transports? Sitting at the service centers waiting to be picked up?

My guess is that Rivian is still trying to figure out the delivery process plus:

- bottle neck at service centers with pre delivery inspection and repairs.
- some possibly waiting for chips
- some with issues that make them undeliverable
- transport limitations
- paperwork
- seat belt sensor recall
- defective parts ( all parts on hand may not meet spec. )

I can imagine that SCs are overwhelmed with doing pre delivery inspection/repairs, deliveries, post delivery repairs

 

[DJG]

Look, I think it would behoove some people to actually listen in to the next earnings call if you haven't already. It will provide some valuable insight into the perspective of the company and what they are actually concerned about and focused on. In case anyone needs to be reminded, the order of stakeholders that the company is serving in order of priority are: 1) shareholders 2) employees and 3) customers. It is wildly unrealistic to expect a company of this size to cater to the individual needs and desires of individual customers.

Not once on any earnings call has the conversation centered around who they are delivering to, early order holders vs. newer, delivery window estimates, or anything like that. They haven't even once talked about the R1S and whether it is on schedule or not. Nobody cares or asks, because it frankly isn't important in the grand scheme of things. How many vehicles are you going to make this year, what is the progress towards making more (including new facilities) and will you need more money and when are the only things that are important.

Secondly, for those arguing that it could potentially lead to bad PR, I'd counter that with this. Imagine a story running highlighting the fact that despite popular belief, the wait time from order to delivery may not actually be two years, it could be as little as a couple months. In an unrealistically exaggerated scenario, 10k early preorders cancel because they feel personally insulted, but are backfilled by 30k new orders that are now enthusiastic about a quicker than expected delivery and could give two shits about a 2018'er crying into their pillow.

The long term success of the business will have little to do with how they fulfill the backlog, only that they do fulfill it. It's a once in a lifetime problem that they won't have to deal with again (ramping up production with a backlog for the first time), so it really doesn't matter from a perception standpoint how they handle it. The pool of potentially offended people is finite and insignificant to the millions of future customers they will have.

This isn't grabbing a number at the deli, they are running a mass manufacturing business. Frankly, they don't NEED to provide any delivery estimates at all given the circumstances, so anything we get at this stage is a blessing. Also, if you refer to them as "promises", you've already lost...

Put your big boy pants on people.

 

[Swilly]

Simple, not complex or out of control. Not necessarily what folks that have been waiting for years want to see, but we also need the company to succeed so we can enjoy our Rivians, whether that’s now or in 6 months. Seems like their plan is to try and get older orders filled while throwing in some randomization of orders, aka the lottery. Filling some newer orders while prioritizing older orders:
1) Incentivizes new orders
2) Increases average profit per build/decreases loss per build
3) Decreases resale value above msrp for those trying to flip their trucks.
4) Allows for batching that optimizes manufacturing and delivery

I’m not a sales/logistics/manufacturing/delivery expert, but I did stay at a Holiday in Express last night (and think I may have brought home bedbugs).

 

[EVTrucking]

Look, I think it would behoove some people to actually listen in to the next earnings call if you haven't already. It will provide some valuable insight into the perspective of the company and what they are actually concerned about and focused on. In case anyone needs to be reminded, the order of stakeholders that the company is serving in order of priority are: 1) shareholders 2) employees and 3) customers. It is wildly unrealistic to expect a company of this size to cater to the individual needs and desires of individual customers.

Not once on any earnings call has the conversation centered around who they are delivering to, early order holders vs. newer, delivery window estimates, or anything like that. They haven't even once talked about the R1S and whether it is on schedule or not. Nobody cares or asks, because it frankly isn't important in the grand scheme of things. How many vehicles are you going to make this year, what is the progress towards making more (including new facilities) and will you need more money and when are the only things that are important.

Secondly, for those arguing that it could potentially lead to bad PR, I'd counter that with this. Imagine a story running highlighting the fact that despite popular belief, the wait time from order to delivery may not actually be two years, it could be as little as a couple months. In an unrealistically exaggerated scenario, 10k early preorders cancel because they feel personally insulted, but are backfilled by 30k new orders that are now enthusiastic about a quicker than expected delivery and could give two shits about a 2018'er crying into their pillow.

The long term success of the business will have little to do with how they fulfill the backlog, only that they do fulfill it. It's a once in a lifetime problem that they won't have to deal with again (ramping up production with a backlog for the first time), so it really doesn't matter from a perception standpoint how they handle it. The pool of potentially offended people is finite and insignificant to the millions of future customers they will have.

This isn't grabbing a number at the deli, they are running a mass manufacturing business. Frankly, they don't NEED to provide any delivery estimates at all given the circumstances, so anything we get at this stage is a blessing. Also, if you refer to them as "promises", you've already lost...

Put your big boy pants on people.

Big pants are on and I still disagree with you.

If Rivian, given they only expect to build 15-16k R1s, has no regard for their customers then state that. They should communicate that allocation is totally based on what makes Rivian the most money in the short term. Be clear and not provide miss information in the form of Configuration/Location/Pre order date.

I am not advocating catering to each individual in the order they pre ordered. Do what is best for Rivian (batch production, delivery ect..) and the customers (try hard to avoid skipping over folks for a tiny financial return ). Tiny financial return in regards to only building and delivering 15-16k R1s in all of 2022.

As stated before if Rivian was not parts limited and projecting 30-40k in 2022 then that is a totally different story. Most everyone gets their vehicle in a relatively short period of time.

The bottom line for me is that since Rivian's stated allocation methodology is Config/Location/Pre order date then do that!!!!!

 

[DJG]

If Rivian, given they only expect to build 15-16k R1s, has no regard for their customers then state that. They should communicate that allocation is totally based on what makes Rivian the most money in the short term.

As stated before if Rivian was not parts limited and projecting 30-40k in 2022 that is a totally different story.

Come on now, don't hold your breath for ANY company to make a public statement like that....silly. "Thanks for coming today, glad to see everyone. We, Rivian, are very excited and would like to formally announce that we in fact do NOT care about you, and are only looking out for Numero Uno. Thanks, and there will be no questions."

Not sure how parts limitations plays into anything. As stated, all that matters is the # made and delivered, not where/to whom they went. If they had only been able to make 500 vehicles this year, the argument would be the same.

Again, this has nothing to do with what is "right" and "wrong" morally, ethically, socially or whatever. It's business and shit happens. You don't see Ford prioritizing any specific subset of reservations for the Lightning, and they are just as constrained.

 

[AllInev]

Personally, I emailed Tony this morning explaining how disappointing it is that they keep making these unforced errors and recommend everyone in this situation do the same. He probably doesn't care about 5-10 emails, but he may care about 100+ reiterating the same point.

Agree. The more emails Tony gets about this the more likely he and his team will take it seriously.

Tony - [email protected]
RJ - [email protected]

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