Rivian R1T electric pickup
Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
If – or, more likely, when – all business books begin to fall on Rivian Automotive Inc., at least one must have the title: Do all the difficult things at once. The young company is currently trying to finish a factory and three different vehicles, while planning a trip to a Wall Street IPO. Apparently, CEO RJ Scaringe was still sleeping a little too much, because Rivian two weeks ago announced a plan to build his own charging network too, à la Tesla.
The decision, which Scaringe has been suggesting for years, comprises at least 3,500 fast chargers at 600 locations and at least 10,000 slower-loading “landmarks” in camps, motels, hiking trails and the like – all installed by 2024. It is a huge expensive capital project: Hardware alone in building a fast-loading website can cost up to $ 320,000, according to one study, not to mention maintenance and other overhead costs. In short, Rivian’s independent strategy is a silent indictment of US infrastructure: what is out there at the moment, apparently, is not enough.
Tesla opted for the same type of proprietary network, but that was nine years ago. The non-Tesla charge map has become denser since then, but the pins are still thin beyond urban centers, and the center of the country is covered with electron deserts.
Tesla currently has 9,723 fast charging cables in the U.S., according to the latest Department of Energy count. The other networks combined have only 7,589 public charging points, and these are much less spread out. The Tesla club is covered in Millinocket, Me., Athens, Ala. And Casper, Wyo. – all the places where Ford’s new Mustang Mach-E can struggle to run freely. While this is a challenge for Ford, it is a major obstacle for Rivian’s “electric adventure vehicles”, which are apparently heading to places wilder than the Santa Monica farmer’s market.
Plug Power
Source: US Department of Energy
There is good reason for the anemic loading map. Microeconomics for a public charging network is still a bit brutal. Profits will not appear without a lot of EV traffic; EVs will not appear without many chargers. But on a micro-micro level, there is another variable in the equation: chargers sell cars. Elon Musk saw this clearly a decade ago. When Rivian installs a charger in an electron desert like North Dakota, the revenue in return flows through a thicker tube than in a charging empire that only sells electricity.
In fact, a look at Rivian’s map influences his sales ambitions. He has a series of shippers planned for Alaska, Hawaii and Michigan’s Upper Peninsula. Even Prince Edward Island and Nova Scotia will see seasons. “We can be really creative in terms of locations,” said Scaringe TechCrunch in December, “so that we can get to places that are very specific and exclusive to Rivian”.
Rivian loading map
Source: Rivian
In addition, Rivian plans to hand over keys to 100,000 delivery vans to Amazon.com over the next decade, including 10,000 by the end of next year. Undoubtedly, the retail giant would like to deploy (and charge) these platforms widely. Meanwhile, non-Rivian vehicles will be able to use the company’s slower chargers, another potential revenue stream. “Excess demand is a good problem to have,” says Ryan Fisher, an analyst at BloombergNEF, and it is worth locking up the main loading locations before EVs infiltrate the most remote locations in the country, he adds.
The current auto industry has not been so adventurous, but it has yet another variable in the equation: gas-powered revenue. These cars can still sell vehicles in places like North Dakota, where porters are in short supply. As such, the industry has largely decided to jury its own billing networks, essentially patching up a patchwork of interoperability agreements with third-party networks. Ford Motor Co., for example, connected in 2017 to Electrify America, the charging network that Volkswagen established as part of the solution to its Dieselgate emissions fraud scandal. (Public billing networks have become even more important this week for Mach-E owners, such as Ford stopped selling its $ 799 home chargers because some were not working properly.)
Finally, Rivian needs to think carefully about the long term – specifically the big, soft calculation of brand value. The company spent 12 years building the capital behind its name, and almost every step was deliberate – from making seven-minute snowboard films to appearing on an Aspen gondola for an impromptu interview. It is also hiring “guides” who will be personally assigned to connect with individual buyers.
Now, on the verge of putting the product on the market, it would certainly be easier and cheaper to outsource the billing for a third party plug in a motel parking lot, but that would be out of step with the company’s approach so far. Charging will be a big part of the Rivian’s user experience, no doubt as important as the lights, acceleration and style “Camp kitchen” that slides out of the bucket. Apparently, for Scaringe and the company, the payoff – the potential savings from ignoring the proprietary network – is not worth the risk.