Rivian’s R1T electric pickup
Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
If – or, more likely, when – all business books on Rivian Automotive Inc. begin to fall, at least one must be titled: Do all the difficult things at onceThe fledgling company is currently trying to complete a factory and three different vehicles, while planning a road trip to a Wall Street IPO. Apparently Chief Executive Officer RJ Scaringe was still a little too much sleep, because Rivian announced two weeks ago a plan to also build its own charging network, à la Tesla.
The decision, which Scaringe has been referring to for years, will include at least 3,500 fast chargers in 600 locations and at least 10,000 slower waypoints at campgrounds, motels, hiking trails and the like – all installed by 2024. It’s a hugely expensive capital project – the hardware just for it. building a fast charging station can cost up to $ 320,000, not to mention maintenance and other soft costs, according to a study. In short, Rivian’s own strategy is a silent indictment of US infrastructure: what’s out there right now is apparently nowhere near enough.
Tesla opted for the same kind of proprietary network, but that was nine years ago. The non-Tesla charging map has gotten denser over time, but pins are still thin outside urban centers, and the center of the country is covered in electron deserts.
Currently, Tesla has 9,723 fast charging cables in the US, according to the latest Energy Department figures. The other networks together only have 7,589 outlets for public charging, and they are much less widespread. The Tesla club is covered with Millinocket, Me., Athens, Ala., And Casper, Wyo. – all places where Ford’s revamped new Mustang Mach-E might struggle to run freely. While this is a challenge for Ford, it is a bigger obstacle for Rivian’s “Electric Adventure Vehicles,” which supposedly go to places wilder than the Santa Monica farmers’ market.
Plug it into the socket
Source: US Department of Energy
There is a good reason for the anemic charging card. The microeconomics for a public charging network is still pretty brutal. Profits won’t show up without a lot of EV traffic; EVs will not show up without many chargers. But at the micro-micro level, there is another variable in the equation: chargers sell cars. Elon Musk saw that clearly ten years ago. When Rivian plans a charger in an electron desert like North Dakota, its revenue flows through a thicker tube than for a charging empire that only sells the electricity.
A look at the Rivian map indeed colors his sales ambitions. It has a slew of chargers planned for Alaska, Hawaii, and Michigan’s Upper Peninsula. Even Prince Edward Island and Nova Scotia will see stations. “We can be very creative in terms of locations,” said Scaringe TechCrunch in December, “so we can reach places that are very specific and unique to Rivian.”
Rivian charging card
Source: Rivian
In addition, Rivian plans to hand over the keys to 100,000 vans to Amazon.com over the next ten years, 10,000 of which by the end of next year. Undoubtedly, the retail giant would like to deploy (and charge) those platforms on a large scale. Meanwhile, non-Rivian vehicles will be able to use the company’s slower chargers, another potential revenue stream. “Over-demand is a nice problem,” said BloombergNEF analyst Ryan Fisher, and it is valuable to shut down prime charging sites before electric vehicles infiltrate the more remote parts of the country, he added.
The established auto industry hasn’t been all that adventurous, but it has another variable in the equation: gas revenues. These cars can still sell vehicles in places like North Dakota where chargers are scarce. As such, the industry has largely decided to jury-rig its own charging networks, essentially bringing together a patchwork of interoperability agreements with third-party networks. Ford Motor Co., for example, in 2017 connected with Electrify America, the charging network that Volkswagen set up as part of the settlement of the Dieselgate emissions scandal. (The public charging networks became even more important this week for Mach-E owners, such as Ford stopped selling its $ 799 home chargers because some of them weren’t working properly.)
Finally, Rivian needs to think hard about the long run – especially the big, soft calculus of brand equity. The company has spent 12 years creating the capital behind its name, and almost every step has been done on purpose – from producing seven-minute snowboarding movies to showing up in an Aspen gondola for an impromptu interview. It also hires “guides” who will be personally assigned to liaise with individual buyers.
Now, on the verge of putting the product out into the wild it would certainly be easier and cheaper to outsource charging to an external plug in a motel parking lot, but that wouldn’t be in line with the company’s approach to now. Charging will be a big part of the Rivian’s UX, arguably just as important as the lights, gear, and handy “Camp kitchen” that slides out from under the cargo bed. Apparently, for Scaringe and the company, the reward – the potential savings from skipping its own network – isn’t worth the risk.