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Rivian: R1S Test Drive
Some kinks aside, the R1S is a great electric SUV. By Benjamin Tan
Rivian (RIVN 0.00%↑) has always been touted as the closest next-gen electric vehicle competitor to Tesla (TSLA 0.00%↑) although recent market conditions have stacked the odds against newcomers that are still in nascent stages of ramping. The era of easy capital has ended - for now, at least - making it much harder for fast growers to sustain growth, especially if it is capital intensive. Still, Rivian has some strong backers, including Amazon ($AMZN) which holds ~18% of the company.
For FY 2022, Rivian produced 24,337 vehicles and gross profit was negative $1bn. It is guiding for a production volume of 50,000 for FY 2023 and expects to generate positive gross margins only in FY 2024. In contrast, Tesla is aiming for a total production of 2mn vehicles for FY 2023 alone, and gross margins, despite recent price cuts, held strong at almost 20% for Q1 2023.
Tesla: No SUV in Line Up
My husband and I are looking for a second car to plan ahead of additions to our family. Our current mode of transport is a Tesla Model Y with FSD, which we both really love but it does not have a third row. Both Model X (and later versions of Model Y) come with third row options, but neither is a traditional SUV that can carry seven adults. Despite my argument that we can make do with one car - or the second one may be a Model 3 - my American partner is hyper focused on getting a car with a viable third row seating capacity.
So off we went for a Rivian test drive!
R1S: First Impressions
As much as I am a Tesla fan, I have to admit that the R1S is a beautiful electric vehicle. Interior quality is superior to any Tesla model - the two companies have different design philosophies. Rivian uses more elaborate materials, with attention to minor detail, and the result is a luxury feel. Comparatively, Tesla interiors are simple, clean, and deliberately plain.
The R1S comes with plenty of features missing in Tesla models, like two screens, heated steering wheel, and even lumbar support for the driver’s seat. It is pretty over the top, I have to say.
Seating capacity is generous and adults can easily fit into the third row.
Round 1: Rivian won over Tesla!
Software and Driving: We Prefer Tesla
The software interface for Rivian is intense, offering multiple driving modes. The Rivian employee demonstrated how the vehicle could adjust its driving dynamics across a few of the eight modes — four for the road, and four for when it ends — that let drivers adjust ride height, suspension stiffness, accelerator pedal response, and more to optimize for comfort, efficiency, and performance in any terrain. I was more confused than impressed, knowing that most of the modes will be unutilized by city dwellers like us.
On our test drive, we noticed a lack of assistance from its Driver+ features, which are nowhere near the sophistication of Tesla FSD. The physical experience of driving the R1S also did not feel as nice to us, compared to a Tesla. Rivian is still a new manufacturer, and only delivering the R1S in small volumes to customers. In contrast, Tesla has produced millions of vehicles for more than a decade now; whatever manufacturing kinks have all been worked through by now. Our Model Y is the result of all the learnings from their earlier productions of Roadster, Model S, and Model 3.
Round 2: Tesla won over Rivian!
Future of Rivian: Are R1S and R1T Owners Concerned?
I spoke to a new owner who took delivery of his R1S at the service center. He was one of the first customers to place an order more than two years ago, and flew into Atlanta from Ashville to pick it up because he did not want to wait three more weeks for it to be delivered to his home!
When I asked him if he had any concerns regarding the viability of the company, he said even if Rivian were to change hands due to capital constraints, he felt confident that the new owners would continue to support the brand, production, and maintenance of RT1 and RS1, because they are loved by customers.
Let’s hope Rivian will get through this trying period and ramp up to profitability, because I suspect we will soon be taking delivery of the R1S in the coming months ourselves….
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