Rivian’s Big Slip & Recovery

By Gary S. Vasilash

One of the things that Tesla is able to do is to have no traditional marketing communications, whether in the form of advertising or public relations activities.

When the CEO is nothing but voluble and he has 76.3-million Twitter followers, the company really doesn’t need a whole lot in the way of traditional comms. In addition to which, many people with Teslas aren’t simply owners but are absolute advocates. The amount of messaging they do dwarfs any conceivable paid media.

Earlier this week Rivian, the nascent EV company, announced that it was boosting the prices for its pickup and SUV. Anyone who has gone to a grocery store or a gas station knows that there are nontrivial price hikes.

But what Rivian did was not only announce the price rise, but said that it was applying it to those who had preordered the vehicles and had a configured price.

Suddenly that expected cost was increased by some 20%.

The backlash was swift and expected. At least expected by everyone who wasn’t in the Rivian executive suite.

Credit, however, must go to CEO RJ Scaringe, who publicly announced the error of their ways in an open letter.

Unlike other many other CEOs he announced that mistakes were made. He wrote:

“I am truly sorry and committed to rebuilding your trust.”

Those who had orders in place prior to the March 1 announcement will have their price honored.

Scaringe acknowledged, “trust is hard to build and easy to break.”

Although these are still comparatively early days in the EV world, the fact that there are a growing number of providers in that space mean that there are more options that consumers can select from.

No company wants to get a customer just once. And no startup company wants to lose a customer that it had.

It will be interesting to see whether Scaringe’s apology is going to not only recover all of Rivian’s pre-order customers but gain new ones.

At least the apology is good.

Rivian’s Second Factory

And what about its first?

By Gary S. Vasilash

Word is that Rivian, the company that will be producing an electric pickup—the R1T—and an SUV—the R1S—at its factory in Normal, Illinois (quite a name for a burg, if there ever was one), where it is also producing commercial vehicles for Amazon, which is one of its investors (as are Ford, Cox Automotive and others), is looking for a plot of land upon which to build a second factory with a 200,000-vehicle per year capacity.

Seems like the company has big aspirations.

And on the subject of big, it also seems that Texas has the inside track on the factory.

But here’s the thing: the 2.6-million square foot factory in Normal has capacity of over 200,000 vehicles.

You’d think, perhaps, that they would want to make sure that (1) they have all of the bugs worked out of the processes and (2) that they would have sufficient demand for their vehicles before looking to spend a rumored $5-billion on a second factory.

Of course, factories don’t go up overnight.

That said: Might this not be a bit premature?

General Motors Embraces E-Commerce

The Cadillac LYRIQ, which is to become available in the first half of 2022, certainly looks promising as an electric, luxury SUV, one that may help the brand, which, let’s face it, has been struggling in the market for the past few years—here’s something that is not well known: although Acura is generally considered to be having a tough time of it in the U.S. market, in 2020 it outsold Cadillac, 136,983 vehicles to 129,495 vehicles; Acura also outsold Cadillac in 2019.

The Cadillac CELESTIQ, an electric sedan that takes luxury to levels that Cadillac hasn’t had on offer for, arguably, ever, combining hand-crafted materials with technology, such as a four-quadrant glass roof that allows individual selection of the level of transparency, is another arrow in the quiver of a transforming brand. Although it is still a concept vehicle, it is unlikely that General Motors would draw as much attention to it as it has (it was part of Mary Barra’s CES 2021 keynote) were it—or something damn close to it—not going into production.

That said, even though General Motors is investing $27-billion in vehicle electrification and automation, the most important launch, revealed during Barra’s presentation, is of a vehicle that none of us will individually own:

The EV600, an all-electric, purpose-built light commercial vehicle.

The LYRIQ and the CELESTIQ may be sexy, but logistics is where it is at and will drive the proliferation of electric vehicles in a way that it will take the consumer market a long time to catch up to.

The GM EV600, a purpose-built electric delivery van. The company has even started a logistics support business, BrightDrop. (Image: GM)

The owners of fleets of commercial vehicles—like FedEx, which GM worked with on the development of the EV600 (and the EP1, an electric rectangle on wheels that has a capacity of 200 pounds and a top speed of 3 mph)—do the math when it comes to vehicle acquisition. If it is going to be to their financial advantage to get EVs, then they’re not going to worry about things like available infrastructure, because they’ll build their own. They’re not going to have range anxiety, because they know precisely where their trucks are going and when.

(And it probably doesn’t hurt that it provides a green sheen to their brands by going EV.)


–Amazon, which owns a piece of it, is having Rivian build electric delivery vans that are to be on the road next year at a number of about 10,000, perhaps going to 100,000 by 2030.

–Ford has announced the 2022 E-Transit delivery van that is going to be available later this year, and emphasized the benefits of the electric propulsion system vs. its own internal combustion offerings (with the scheduled maintenance of the E-Transit being an estimated 40% less over eight years/100,000 miles).

–And there are start-ups like Arrival, which companies including Hyundai and UPS have invested in.

Sure, we pay attention to LYRIQs and CELESTIQs.

But consider this: in an industry that seems to be shedding operations, General Motors has established a new business, BrightDrop, that is dedicated to delivery, not only vehicles like the EV600 and EP1, but even logistical software services.

This is a non-trivial commitment—and likely to be a prosperous one, as Mary Barra and her colleagues know that commercial companies do the math and need a whole lot less persuading to go electric.–gsv