surrounding hype Rivian's (Riven 3.27%) R2, R3, and R3X announcements have been blowing investors away recently. There's a good reason for that. These more affordable electric vehicles (EVs) could unlock abundant demand from new customers and could be a defining moment for the company in driving profitability.
Amid all the R2 hype, one recent move by Rivian shouldn't be overlooked. This is great news for investors as they have gained a new electric van customer.
Foray into commercials
While investors may have noted the more than 68,000 R2 reservations within 24 hours of its announcement, one of the company's most important stories will revolve around its electric vans. It's not just that Rivian still plans to deliver 100,000 vans; Amazon The end of exclusive partnerships by 2030 will open the door to similar customers.
Rivian expects production capacity at the former Illinois plant to reach 215,000 vehicles. The company's production forecast for 2024 is just 57,000 units, which leaves plenty of room for growth.
This means Rivian could receive large orders for electric vans by the time Rivian begins production of the R2 crossover in early 2026. With the recent addition of one such customer, a unique partnership with Rivian could open even more doors for the company's electric vans.
What's the big deal?
Before we explain what's unique about this deal, let's discuss the specifics of the partnership. Morgan Olson is a division of JP Poindexter & Co., which has been building vans since 1945 and has now been selected to build electric delivery vans for Canada Post. What's surprising is that Rivian will supply the platform for those vans.
According to FleetOwner, JPCO CEO John Poindexter said, “We have concluded that Rivian produces the most reliable and best-tested EV chassis available.” Stated.
This deal does a few things for investors. First, this shows Rivian's production flexibility as it helps Rivian electrify and adapt the platform for use in right-hand drive vehicles.
Second, it opens the door for companies looking to electrify vehicles that require just the platform and battery pack, rather than a full Rivian van.
Third, JPCO was impressed after touring the factory and went so far as to call Rivian its most reliable chassis partner, further lending credibility to the company's move into the commercial field of electric vans.
Preparing for 2025
Management said on a conference call that this year will be filled with pilot programs, testing and negotiations, and that 2025 could be the year Rivian signs deals with many commercial customers for electric vans.
It's not far-fetched to think that within a few years, Rivian's electric van business could be as hyped 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 many partnership.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Daniel Miller has no position in any stocks mentioned. The Motley Fool owns a position in and recommends Amazon. The Motley Fool has a disclosure policy.
