Rivian Takes Charge with Direct Sales Experiment

The electric vehicle innovator, Rivian Automotive, is shifting gears by embracing a unique approach to sell off its surplus of R1T electric pickup trucks. In a bold move, the company is inviting potential buyers to visit its factory parking lot in Normal, Illinois for an in-person shopping experience.

After commencing production in late 2021, Rivian quickly transitioned from having extended waitlists to an excess inventory of some versions of the R1T. The company’s decision to host a one-day sales event where customers can “shop in person” deviates from its predominantly online sales model, wherein vehicles are typically built to order and then delivered to the customers.

At the event, buyers will have the opportunity to browse through numerous pickup trucks parked in a lot, which Rivian has christened as the “Rivian Dealership.” If a truck piques a customer’s interest, they can buy it and take it home on the same day, a move that’s a rarity in the automotive business.

The challenge facing Rivian, however, lies in keeping up with sales as it lags behind production. In contrast to its more established rivals that have extensive networks of franchise dealerships, Rivian has chosen to sell directly to consumers. “Rivian doesn’t have that lever to pull. It is up to them to sort out that inventory,” comments Jessica Caldwell, an auto analyst at car-shopping website Edmunds.

Although Rivian has showrooms for customers to see and test drive vehicles, these stores don’t maintain inventories of trucks and SUVs for immediate purchase. The company attributes its excess inventory to last-minute order changes and a buildup of its most in-demand vehicle configurations.

As competition intensifies in the EV sector, Rivian has reported shorter wait times for some customers. Yet, monthly vehicle registrations for the R1T truck have fallen, while those for the R1S SUV have largely increased.

Rivian’s CEO, RJ Scaringe, has said that long wait times are the main reason for order cancellations, and they are working to increase SUV production at the expense of trucks.

As the EV startup seeks to revolutionize sales with its physical retail experiment, it simultaneously faces pressure to boost revenue and reduce quarterly losses amidst dwindling cash reserves.

With an increasingly competitive market and dealerships restocking, the demand isn’t gone, but companies like Rivian need to work harder to woo customers. As Stephanie Brinley, the principal auto analyst at S&P Global Mobility reportedly puts it, “You do have to sell vehicles, believe it or not.”