While customers appreciate having a wide range of additional features to choose from when ordering their vehicles, this could quickly become a nightmare for the car manufacturer. Each option must undergo thorough testing before being approved for production, and certifications must be updated for many changes. It may seem like a minor detail that you select in the configurator, but too many options can lead to uncontrollable costs.
Moreover, it creates a logistical challenge to produce different models with varying features on the same production line. This is why only the largest car manufacturers can afford to do so, while others prefer to offer bundled extras or different trims. Japanese car manufacturers owe much of their manufacturing efficiency to their simplified configurations.
Therefore, it is wise for electric vehicle (EV) startups to optimize costs by offering fewer options and prioritizing configurations that are easier to build and provide the highest profit margins. Tesla, despite becoming a major car manufacturer, still adheres to this strategy, which has consistently proven its benefits. Rivian has also followed this approach in the past by expediting specific configurations to streamline deliveries and optimize costs.
Still, the EV startup seems to be moving in the wrong direction after announcing not one, but two Standard battery packs on January 8. The way this is presented makes the R1 EVs appear more affordable or significantly improves their range, depending on one’s perspective. The most affordable configuration was initially listed on Rivian Vehicle Studio, offering a range of 270 miles for $73,000 for the R1T or $78,000 for the R1S.
Following the announcement of the new battery options, the R1T Dual Motor AWD with the Standard battery indeed provides a range of 270 miles. However, it is now $3,100 cheaper than previously announced, priced at $69,900. For the original price of $73,000, Rivian now offers the Standard+ battery pack, which boasts a range of 315 miles. The same applies to the R1S, which starts at $74,900 with the Standard pack (270 miles) and is priced at $78,000 for the Standard+ pack with a range of 315 miles.
This move makes both Rivian EVs more affordable, and the deal becomes even more attractive because both battery options qualify for the $3,750 IRA tax credit. This means that you can purchase a Rivian R1T for as low as $66,150 and an R1S for $71,150. However, Rivian offers an even better deal for those who lease their truck or SUV. By deducting the entire $7,500 tax credit, the cheapest R1T configuration is available for $536 per month with a $6,000 down payment.
Image: @RivianTrackr via X
Despite initial assumptions that the more affordable battery choices utilized LFP chemistry, Rivian has clarified that both Standard packs employ NCA cells. This decision allowed Rivian to reduce the battery pack capacity (and subsequently the price) by using fewer modules. Rivian has further stated that the LFP cells will be introduced to the Standard pack at a later date.
Additionally, Rivian has disclosed the usable capacity of all four battery packs available for the R1 EVs, revealing a notable disparity between the Standard and Standard+ batteries. While the former boasts a capacity of 106 kWh, the Plus version offers an additional 15 kWh, totaling 121 kWh. Rivian then offers increments of 10 kWh, with the Large pack providing 131 kWh and the Max pack containing 141 kWh.
Rivian’s pricing structure for these battery options is also intriguing. The Standard+ battery provides the best value for an extra cost of $3,100, offering a respectable range of 315 miles that is suitable for most scenarios, excluding heavy towing.
Image: @RivianUpdates via X
More concerning than the pricing structure is the impact of this extensive range of options on Rivian’s financial performance. The company now offers not only four battery choices, but also five combinations of wheels and tires, three motor variations, nine exterior colors, and five interior options. When multiplied together, these variants amount to 2,700 combinations. However, the actual number is closer to 1,000 due to certain combinations being incompatible.
The Standard pack is exclusively available for Dual-Motor AWD configurations and cannot be selected for Performance or Quad-Motor variants. The Standard+ battery pack can be configured for either Dual Motor AWD or Performance trims, but not for Quad Motor AWD. The latter is solely offered with the Large battery pack, and additional restrictions apply across the entire lineup.
Considering that we are discussing two vehicle lines, the complexity of managing these options is doubled. This undoubtedly presents challenges in achieving profitability. Hopefully, Rivian will assess customer preferences and streamline the options in time for the upcoming refreshed R1 lineup, which is expected later this year. This will also coincide with the introduction of LFP cells to the Standard pack, as confirmed by Rivian.
According to the Source autoevolution.com