New Vehicles Are Coming

Rivian’s (NASDAQ: RIVN) recent announcement of five new vehicle models is a significant development for the company, expanding its product lineup beyond the R1T and R1S. This move aims to mirror Tesla’s (NASDAQ: TSLA) success with the Model 3 and Model Y, transitioning from high-end to more mass-market vehicles. The new models are expected to include a compact truck, a smaller SUV, a compact van, a sedan, and a wagon, enhancing Rivian’s competitiveness and market reach.

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Transcript:

Austin, shares of Rivian, let’s face it, they’ve been volatile.

First falling for months on EV demand and bankruptcy fears, but then they soared by as much as 50% on the news that Volkswagen was making a large investment to the company.

Now, they’ve bounced around a little bit since, but one of the most exciting new developments is the announcement of five totally new vehicles.

So what’s going on with these new vehicles and how big of a deal are they for Rivian investors?

Yeah, these five vehicles are a huge deal.

A limited product lineup is going to, of course, limit your growth.

But let’s look at some of the reality and the numbers here.

So it’s certainly been an exciting time to be a Rivian investor.

So for context, the R1T and the R1S are the company’s first two vehicles, a truck and an SUV.

But they’re really one and the same.

They’re built on the same platform.

The interiors are identical.

There’s very little retooling between the two models here.

And the company’s just wrapped up Project Peregrine, which is taking their estimated losses from about $39,000 per vehicle down thousands of dollars.

We’re not sure exactly how much yet.

And those savings will, of course, scale with operational growth.

But great to see.

So now the company’s announced their R2 and their R3, which is a smaller SUV and a more compact vehicle.

So we’re going to have effectively four vehicles in the lineup.

But in addition to that, the company has revealed intentions to build five additional vehicles beyond that.

So one Gen 2 vehicle, one midsize vehicle, and three mass market vehicles.

So this is a really big deal.

We look at Tesla.

Tesla really became the company it is today on the back of the Model 3 and the Model Y as they were able to transition from those early launch Model S, Model X vehicles to the more popular Model 3 and Model Y.

So this is Rivian’s version of doing the same thing, and that investment from Volkswagen makes it a lot more feasible.

So let’s take a guess at what some of these vehicles are based on consumer demand and where some of the trends are.

One guess for me that I think is relatively easy is a compact truck.

So the R1T was their first vehicle.

They understand that product and that vehicle and those features really well, but it is pretty large.

And then you look at smaller compact trucks on the market today, like the Ford Maverick, it’s selling extremely well.

It’s scaled up over 100% from 2022, I’m sorry, from 2023 to 2024.

And one of the reasons it is doing so well is largely due to the fuel efficiency of that size and the fact that it’s offered as a hybrid.

So a small EV truck really fits in with the feature set that consumers are looking for there.

So I think one of these five vehicles is going to be a compact truck.

They’re also the best selling vehicle format in the U.S., so it seems like a very safe bet.

Another one of the vehicles of the 5-ounce is probably a compact SUV for the same reasons.

So we have talked about the R2, which is a smaller SUV than the R1S.

It’s not that small.

It’s still about the size of the Jeep Grand Cherokee, so it’s a midsize SUV.

So a smaller EV SUV like the EX30 or the Honda HR-V size makes a lot of sense.

So that leaves three remaining vehicles.

These sort of things get a little bit more speculative and a little more challenging to predict.

I’m going to guess there’s probably a sedan in there because they’re missing it in a product lineup.

And there’s probably a wagon as well.

Something, you know, sort of an elongated SUV, something that could compete with the Subaru Outback, same demographic there.

And the last one, and this is kind of the flyer for me, I’m betting on a compact van.

Remember that a van is actually one of Rivian’s very first vehicles.

They’ve got their EDV, which is a large delivery vehicle that Amazon famously has placed a lot of orders for.

And I think they could come out with a postal size or a smaller service van, which could not only work for deliveries and online e-commerce, but also for consumer applications.

They almost certainly are going to be smaller than any of their prior vehicles because what we can see on Rivian’s roadmap here is these are mass market, more affordable vehicles.

My guesses in order are a small truck, a smaller SUV below the R2, a smaller van, sedan, and wagon.

So really building out that Rivian lineup and getting away from their launch R1T and R1S flagship, very expensive vehicles, down to more affordable mass market vehicles and hitting that scale of production escape velocity the same way Tesla did with the Model 3 and the Model Y.

Yeah, and Austin, you look at two doing a lineup like this, as you mentioned, R1T, R1S, large vehicles, getting things like that crossover vehicle, getting a sedan.

It probably makes Rivian more competitive on a global footprint as well.

When you’re looking for future scale, that’s an important kind of thrust for the long-term direction of the company as well.

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