Rivian (RIVN) announced on Monday that it is opening up orders for its Rivian Commercial van beyond its initial launch partners, potentially creating a lucrative business for the pure-play EV maker.
Rivian’s commercial van runs on the same platform as the current electric delivery van that Rivian produces for Amazon (AMZN). Though Rivian originally had an exclusive arrangement to produce 100,000 vans for the retail giant, Amazon is currently only using 20,000 vans.
Rivian said that after the end of its exclusivity period with Amazon, it had been testing its commercial vans with large fleet operators, including AT&T, and was now ready to open up orders to other companies utilizing fleets.
Rivian shares were up over 3% in midday trade on Monday.
The Rivian commercial vans come in two sizes, the 500 and 700, with the smaller van offering more payload (2,663 lbs vs. 2,258) but less cargo space (487 cubic feet vs. 652). The two vans start at $79,900 and $83,900, respectively.
“A big step in the right direction for Rivian as the Amazon relationship has changed dramatically. This expands Rivian's opportunity on the commercial EV front,” Wedbush analyst Dan Ives told chof360 Finance. “Smart move at the right time.”
The commercial delivery van business is a big industry, dominated by Mercedes Sprinter vans and Ford Transit vans. Both companies also offer electric versions of their delivery vans, with more and more customers using electric for shorter journeys and local deliveries.
Ford said its E-Transit sales in the US jumped 64% to 12,610 units in 2024, helping grow its Ford Pro commercial unit. Ford sold around 150,000 commercial vans in the US last year.
Mercedes just started selling its eSprinter van in the US in Q4, with sales totaling only 828 units. However, the company did sell a total of 49,500 commercial vans in the US last year.
According to research firm Global Market Insights, the commercial van business is expected to nearly double globally over the next decade, from $109.4 billion in 2024 to $210.3 billion by 2034, with a 6.7% compound annual growth rate (CAGR).
GMI projects the electrified commercial van business will make up around $50 billion of that business by 2034.
The growing e-commerce logistics and last-mile fulfillment business is going to be a big one, as the growth of Amazon, Alibaba, Walmart+, and others can attest. GMI finds the total global e-commerce delivery market was worth $426.2 billion in 2024 and will grow at a healthy 14% CAGR through 2034 to around $1.58 trillion.
Rivian, Ford, Mercedes, and others see this market as significant for its van offerings, with electric being a “duty cycle” that matches nicely with last-mile delivery.
Story Continues
“The EV market is for, we believe, customers who have a duty cycle that matches an EV, which is mostly around town, not long distance,” Ford CEO Jim Farley said to chof360 Finance in late January. “And we think that the pure EV industry is going to start to circle in on the duty cycle; that makes most sense for that customer, where frankly, it's cheaper to operate the vehicles in electric than a combustion [powertrain].”
Wall Street will be looking for more information on the commercial van business from Rivian.
“Rivian has had some interest from other companies such as AT&T, who purchased vans in a pilot program, but it isn’t clear how many Rivian has sold to non-Amazon customers because the company doesn’t disclose that information,” CFRA analyst Garret Nelson said to chof360 Finance. “We think the announcement is more of an indicator that constraints on its production have eased, namely the parts shortage which plagued the company in 2024.”
Rivian will give an update on its commercial unit and other parts of its business when it releases fourth quarter earnings after the bell on Thursday, Feb. 20.
Pras Subramanian is a reporter for chof360 Finance. You can follow him on Twitter and on Instagram.
Read the latest financial and business news from chof360 Finance
