An obscure electric vehicle producer named Rivian Automotive has been making headlines recently, with a prominent industry analyst declaring it a serious industry disruptor.
The Plymouth, Michigan-based Rivian, which was founded a decade ago, is developing a pickup truck and a SUV. Both vehicles debuted in November at the Los Angeles auto show and are set to go on sale in 2020.
Morgan Stanley analyst Adam Jonas said in a recent report, cited in a Bloomberg article, that Nivian has the potential to compete against electric vehicle behemoth Tesla since the company has “access to talent and capital focused on the fastest growing segments of pickup trucks and SUVs.”
Not only has only has Rivian’s headcount soared from 100 employees in 2016 to 600 today, the company is focused on the growth areas of the auto market. Indeed, sedans and other passenger cars made up more than half of the new vehicle market just ten years ago. Through the end of November 2018, that fell to less than one-third, according to research firm IHS Markit.
Another factor that Rivian has going for it is cost. Its pickup truck starts at $61,500 after the federal tax rebate, while its SUV starts at $65,000 after the incentive. Tesla doesn’t offer a pickup truck and its SUV, the model X, sells for $88,000.
I’m not convinced that Rivian will be able to steal substantial market share from Tesla. Rivian’s largest hurdle is making itself a household name like Tesla, but that will prove difficult without an eccentric and famous CEO like Elon Musk at its helm.
In addition, Rivian’s cars still aren’t cheap. Its SUV might be less expensive than Tesla’s, but it’s still way above what an average consumer is willing to pay. According to consumer auto site Edmunds.com, the average American spent $36,495 on a new vehicle in December 2018.
Still, I could be proved wrong. Rivian’s costs are likely to fall as the company company continues to scale up, which would allow it to slash the costs of its vehicles. And who knows – Rivian CEO RJ Scaringe could go on a Twitter rampage any day now.