Rivian isn't Tesla, and that's exactly what some buyers want
There's a market segment yearning for an electric vehicle, but Tesla, its CEO, and sometimes both fail to meet their expectations. This could be a golden opportunity for one of its rivals.
CNN Business spoke to 12 booked Rivian customers, an American automaker focusing on electric trucks and SUVs set to hit the market this year. According to them, Rivian's appeal lies in its difference from Tesla.
They argue that the vehicles are better suited for outdoor lifestyles, traditional in appearance with boxy shapes and a robust look. Many Rivian fans acknowledge their distaste for Elon Musk, particularly his tweets, claiming that Rivian appears more authentic in terms of its environmental commitment and mission compared to Tesla and Musk's attitude towards people.
"I don't really care for arrogant CEOs. It put me off the product," Carter Gibson, a cross-country and snowboarder from California, who swapped his Toyota 4Runner for a Rivian, shared his thoughts.
Some electric vehicle enthusiasts claim their views of Musk have evolved over the years. They point to Musk's derogatory remarks towards a Thai rescue hero and his comments affecting Tesla's stock price, attracting the attention of the U.S. Securities and Exchange Commission (SEC).
"Musk can sometimes come off as a Bond villain, but RJ doesn't give off that vibe," Stephen Henken from Montgomery, Alabama, who currently drives a Prius and a Rivian R1S, said.
Rivian's CEO, RJ Scaringe, holds a doctorate in Mechanical Engineering from MIT and founded the company in 2009. In the subsequent 12 years, the company transformed itself into a legitimate automaker before selling its first vehicle.
Rivian purchased the former Mitsubishi production facility in Bloomington-Normal, Illinois, in 2017. It has raised $10.5 billion since 2019, with significant investments from tech and automotive giants like Amazon and Ford, and sealed a $100,000 deal for delivery vans with Amazon.
However, Rivian's success isn't guaranteed. It's too early to build loyalty or an extensive nationwide service network. It also must prove it can mass-produce and do so profitably, a challenge Tesla, despite some difficulties, has overcome so far.
Tesla did not respond to a request for comment and generally avoids interacting with professional media.
Real Electric Trucks
Real estate broker Matt Thomson from Denver stated he pays up to $700 monthly for gas for his GMC Sierra to drive clients around or transport horses. He lamented having to change the oil every two months.
Thomson declared that he was not usually a risk-taker or early adopter. But he reserved a Rivian R1T pickup truck while his wife booked the SUV, the R1S.
"I've waited 8 years for someone to build a truck like the Rivian," Thomson shared. "Tesla's cars just aren't suitable."
"If we're talking about Rodeos, you'll see Ford F-150, GMC Sierras, Chevrolet Silverados, and that's it," Thomson added. "You just have to adapt."
Andy Crews, based in the San Francisco Bay Area, said he had always loved his father's pickup, but he had a guilty conscience since it only delivered 12 miles per gallon. He added that he went for daily walks or runs, and waited for an electric vehicle. Crews, who owns a Model S since 2013, was not interested in buying a Cybertruck.
"It was built from some strange steel, but it looked ugly," Crews remarked. "It could potentially be a very practical vehicle if the world were to end," he added.
Rivian, however, positions itself as a down-to-earth, adventurous company. According to Scaringe, the company's mission is to "inspire people to do more of the things they love while minimizing our impact on the planet."
Rivian colors, like Glacier White, Forest Green, and Compass Yellow, have names reminiscent of nature. The company offers the option to buy tents that can be mounted on the vehicle's roof and sells special mounts for bicycles, skis, snowboards, kayaks, and surfboards. Traditional car manufacturers like Ford, General Motors, and Subaru also sell comparable accessories. Tesla does not.
"Rivian puts a lot of thought into who will drive their vehicles and how they'll feel while doing it, more than Tesla," said Ryan Michael McCarthy, a truck enthusiast who wanted Rivian's truck because it seemed incredibly practical, with a $5,000 option to install a kitchenette with a stove, sink, and utensils. McCarthy, an Illinois resident, said the Rivian videos, like government employees testing government vehicles in temperatures as low as -40 degrees, drew him in.
"You feel like family," McCarthy said. "You get the sense you want to be part of their culture."
Matt Bowen, a New Jersey resident who identifies as an "exhausted millennial," said it's rare for a company to pay as much attention to its customers as to the product itself. He was impressed by the gifts Rivian gave to future customers, such as "welcome kits" for puppies and partnerships with eco-friendly and community organizations. "It's a full-service mission, and I love it," Bowen, a father who has booked a Model X replacement, said. "We're excited to have a replacement for the Model X that better meets our needs and fits our lifestyle and philosophy."
Crews said he felt that Rivian was putting in a lot of effort to combat global warming. He referred to Rivian's promise to run its vehicle-specific charging infrastructure on 100% renewable energy.
Tesla has claimed since 2012 that its Supercharger network is powered 100% by renewables. Though it's been reported that a Tesla employee stated in April 2023 that the network would be powered 100% by renewables by the end of the year, the LinkedIn post is no longer available.
Is Rivian promising too much and delivering too little?
Renewable energy is just one instance where Rivian buyers believe Tesla has been overpromising and underdelivering. As another example, they point to Tesla's Autopilot and "Full Self-Driving" technologies, which are often delayed.
Naturally, Rivian is at risk of making the same mistake. The company has faced delivery delays in the past, and scaling up to mass production is always a challenge.
David Kirsch, a professor at the University of Maryland School of Business, stated the Rivian team, product, and investors look promising, but there's no guarantee it will meet expectations. Rivian is the first company to bring a modern electric pickup to market, but how large the demand for electric pickups will be remains to be seen.
Rivian wants to prove it can mass-produce vehicles profitably. For established car manufacturers, the transition from mass production to mass customization comes with uncertainty, and the costs may increase, affecting profits.
"The price of Rivian is as high as Ford or General Motors," Kirsch remarked. "Will it take more time or money, or both? Or will they run out of time and money?"
If Rivian can mass-produce, it must also prove it can offer adequate service and support for its trucks, where Tesla has struggled in the past.
"When you see a concept car, you get excited. You see that they can build one, and you're excited," Karl Brauer, an analyst at iSeeCars.com, shared his feelings. "But when you buy the car, that all means nothing anymore."
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Insights:
- Some buyers appreciate Rivian's specific focus on outdoor-friendly vehicles with a traditional look and design.
- Rivian's comprehensive offerings in terms of accessories, customer experience, and environmental responsibility resonate with eco-conscious buyers.
The initial difference between Rivian and Tesla, as experienced by some buyers, is the emphasis on utility, practicality, and a more unique design philosophy. Rivian's vehicles purposefully avoid becoming a beta test for billionaire ambitions, instead focusing on real-life needs and comfort.
In contrast to Tesla's high-performance focus, Rivian's vehicles focus on style and being designed for the consumer, rather than pushing performance specifications. The Driver+ system also doesn't compete for full autonomy, instead offering advanced driver assistance features, such as lane-centering and adaptive cruise control.
Rivian's digital integration, complete with over-the-air updates and a software platform filled with more than 300 digital features, gives it a competitive edge. Environmentally responsible buyers appreciate Rivian's commitment to reducing its carbon footprint, evident through its 100% renewable power promises for its vehicle-specific charging infrastructure.
Rivian's Gen 2 suspension system offers a plush experience, providing comfort on rough roads and reducing fatigue for daily drivers. Additionally, boasting unique features, such as a skateboard platform and quad-motor electric drivetrain, Rivian's vehicles have a strong, proprietary value proposition for buyers.
Although Tesla has faced criticism for its overpromising and underdelivering, Rivian must avoid making the same mistakes and establishes a strong service support network for its vehicles. Now that Rivian is a legitimate automaker, it must focus on delivering its marketing promises, as failure to do so may result in customer dissatisfaction.
Overall, Rivian's market focus on practicality, comfort, and sustainability has attracted certain buyers who prefer this approach to Tesla's.
