The hype surrounding Rivian‘s (NASDAQ: RIVN) R2, R3, and R3X unveiling has overwhelmed investors recently. There’s good reason for that. These more affordable electric vehicles (EVs) could unlock a wealth of demand from new customers, and could prove to be the company’s defining moment on its way to profitability.
One recent move by Rivian shouldn’t be overlooked amid all the R2 hype: It’s inked another electric van customer, and it’s great news for investors.
Pushing into commercial
While investors may have been focused on the over 68,000 R2 reservations in less than 24 hours after the unveiling, one of the company’s most critical stories will revolve around its electric van. That’s simply because not only is Rivian still set to deliver 100,000 vans to Amazon by 2030, the ending of their exclusive partnership opens the door for similar customers.
Rivian expects its original Illinois factory to reach production capacity of 215,000 vehicles. This leaves plenty of room for growth, as the company’s production guidance for 2024 checked in at a meager 57,000 vehicles.
That means Rivian could take on plenty of orders for its electric van before the company begins producing the R2 crossover in early 2026. One such customer recently came on board, and its unique partnership with Rivian could open even more doors for the company’s electric van.
What’s the big deal?
Before we get to what makes the deal unique, let’s cover the partnership details. Morgan Olson is a division of JP Poindexter & Co, which has been making vans since 1945, and now has been chosen to manufacture electric delivery vans for Canada Post. The kicker is that Rivian will supply the platform for those vans.
“We’ve come to the conclusion that Rivian produces the best, most reliable, most tested EV chassis available,” said John Poindexter, JPCO CEO, according to FleetOwner.
This deal does a few things for investors. First, it shows Rivian’s production flexibility, as the company will help electrify and adjust the platform for use in a right-hand drive vehicle.
Second, it opens the door to businesses looking to electrify their vehicles that might not want Rivian’s full van, but rather just the platform and battery pack.
Third, JPCO viewing the factory and being impressed, going as far as to call Rivian the most reliable chassis partner available, gives the company’s electric van push into the commercial space more credibility.
Setting up for 2025
Management has noted on conference calls that this year will be filled with pilot programs, testing, and negotiating, which could set 2025 up as a year when Rivian inks many commercial customer deals for its electric van.
It isn’t farfetched to think that within a couple of years, Rivian’s electric van business could be receiving as much hype as its upcoming R2 crossover. This partnership with JP Poindexter & Co. could be just the beginning of a larger partnership, and for investors, hopefully it’s just the beginning of many partnerships.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Investors Might Have Missed Rivian’s Newest Electric Van Customer was originally published by The Motley Fool
