Rivian's van strategy is flawed says Ford CEO Jim Farley

[Electric Rivilution]

Source: Detroit Free Press

This is what Ford CEO Jim Farley recently had to say about Rivian's van strategy:

“Rivian has one customer. Amazon.”​

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“Rivian only has a van for delivery. 95 percent of the commercial industry is small-medium sized business with like 1,000 different locations. Last-product-delivery is like tiny, tiny. … I mean, FedEx, UPS, they’re great. But I want the plumber who’s got five vans. They don’t have a fleet manager. Everything is super confusing to them. They don’t even have time for the vehicles to go to a dealer and schedule it. They’re really underserved. The big fleets are overserved. They can do it all themselves. They’re huge.”​

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“I always told (Rivian CEO) RJ (Scaringe), ‘Are you sure you want to bet on Amazon? Don’t you want to go after all the real customers?’ But, that’s what he decided to do,” Farley added. “Rivian and the reality of the commercial business couldn’t be more different. Also, most commercial customers aren’t going electric.”​

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You guys agree or disagree with Farley?

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[Dark-Fx]

Sounds like whining it is a market they can't get their foot in the door on with their transit vans IMO. Rivian is going to sell to other consumers in a couple years once their production is fully realized.

 

[COdogman]

He's not wrong necessarily. It is higher risk to have 1 huge customer vs thousands of smaller customers. Still I highly doubt Farley would turn down a deal with UPS/ FedEx/ Amazon. So Ford started with the smaller vans and moved up. Rivian is doing it in the opposite direction. No difference if you sell a bunch of vans.

 

[jjswan33]

Lets not forget about the early investments from Amazon to get them off the ground or the notoriety that having Amazon as a partner gave them for example in the IPO process.

Its hard for me to see how the strategy has been flawed, also it seems sooner than later Rivian will be selling vans to other customers so yeah who cares what Farely thinks.

 

[Dark-Fx]

so yeah who cares what Farely thinks.

He's had a lot of opinions about the rest of the market lately, it's getting tiring. Have to wonder why MSM is giving him a mouthpiece.

 

[kurtlikevonnegut]

He's not wrong about the problems long term with having Amazon as the only customer, but it's myopic to imply that the partnership with Amazon wasn't fundamental to their success to this point and a necessary evil.

 

[dleewla]

i wonder why "everything is confusing to them"... maybe because OEMs are the ones who historically sold them commercial vans? hmmm...

this doesnt fly and its just pure fluff and tactic to try to put Rivian in a negative light because they know if Rivian succeeds with Amazon (which they seem to be doing) they will succeed with smaller businesses.

but Rivian needs to get out of that exclusivity with Amazon ASAP or they will get left behind by having only one customer

 

[itselectric]

Just reading the comment. He implies RJ made a mistake going with Amazon and then ends it by saying small commercial businesses "aren't going electric" which would imply RJ made the right choice, wouldn't it?

On that same note, Amazon is fueling money in to Rivian both investment and product purchasing wise. Amazon is going to be less impacted by macro economical issues than John Doe Plumber down the street, who Farley stated didn't want the van any way.

Summing this up - it sounds to me like there is a massive future market, but the real $$$ that's available today is from Amazon, which will help supplement Rivian until the R2 product expands their customer base and until pricing for a commercial van for Joe plumber is more attractive, better understood/better infrastructure.

I fail to see Rivian/RJ's mistake.

 

[MountainBikeDude]

I don't disagree, but the deal between rivian and amazon was a huge one for Rivian. Just because the product is geared toward fleet operations, doesn't mean Joe Blow couldn't aquire one when Rivian is able to satisfy those requests.

 

[Dark-Fx]

Just reading the comment. He implies RJ made a mistake going with Amazon and then ends it by saying small commercial businesses "aren't going electric" which would imply RJ made the right choice, wouldn't it?

I had Brightdrop reach out to me last week about my interest in their vans. Rivian reached out about the EDV during the time period when they were stated to be trying to get the exclusivity agreement dropped but nothing since then. As far as capability goes for my own use case, the Brightdrop probably fits better because of the enormous battery and AWD. Rivian isn't making AWD EDVs yet but they supposedly have it on their roadmap.

 

[moosetags]

I'm thinking that RJ had it right for his company's situation. Rivian needed the big shot in the arm that Amazon provided to help get off the ground. I'm hoping that Amazon will ease up on their contract with Rivian and allow some van sales to others.

Brian

 

[CharonPDX]

As annoying as it is for people who want to buy the EDV but can't, it was a smart business strategy.

Get a huge order up front to cover the development and ramp-up costs, with only one needed destination to deliver to, and only branch out once things are running smoothly.

 

[Longreach]

Sounds like whining it is a market they can't get their foot in the door on with their transit vans IMO. Rivian is going to sell to other consumers in a couple years once their production is fully realized.

Hardly…….

Ford dominates the small fleet business, just look around your neighborhood. And Amazon (UPS & FedEx too) buy tons of Transit vans. Amazon has always said they will not have a single source supplier.

Rivian picked off some potentially profitable segments to help get their business going using the costly but capable R1 platform. But their long term success entirely relies on a successful mass market R2 solution, not R1. Presumably R2 includes some low cost mass market commercial vehicles too. In that context Farley is correct, but RJ already knows that.

 

[Dark-Fx]

Rivian picked off some potentially profitable segments to help get their business going using the costly but capable R1 platform. But their long term success entirely relies on a successful mass market R2 solution, not R1. Presumably R2 includes some low cost mass market commercial vehicles too. In that context Farley is correct, but RJ already knows that.

EDV/RCV/RLV aren't R1 platform vehicles. Farley also stated that the small customers don't want electric delivery vehicles. So who is wrong again?

 

[DuoRivians]

Ford talks a big game. Yet, their past shows they've always been mediocre.

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