Retail Giants Accelerate Electric Vehicle Initiatives to Compete
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Chapter 1: Retailers Enter the EV Arena
The electric vehicle (EV) landscape is experiencing significant shifts as major retailers take action to develop electric delivery fleets. Notably, as Rivian begins delivering its 100,000 electric delivery vans (EDVs) to Amazon, Walmart is making strides of its own. Despite having a smaller delivery requirement, Walmart has placed an order for 4,500 vans from the EV startup Canoo, with the potential to increase that order to 10,000 in the future.
Additionally, large companies such as Pepsi, UPS, and Sysco have pre-ordered Tesla's innovative semi-trucks, showcasing a broader trend toward electrification in logistics. Amazon, in its quest for electric delivery solutions, has also ordered thousands of EVs from Ram and an additional 1,800 units from Mercedes in Europe. This global momentum indicates a growing recognition among companies of the necessity for electric alternatives to their traditional fleets, a demand that current automakers are not fully equipped to satisfy.
With the rise in demand for electric vehicles, startups like Canoo and Rivian are strategically positioning themselves to supplement their passenger car sales by catering to business needs. The presence of corporate clients could significantly impact the viability of these startups in a competitive market.
Section 1.1: How Retail Partnerships Benefit EV Startups
Both Rivian and Canoo offer similar product lines, featuring a 7-seater SUV and a pickup truck, and both aim to target commercial sales. A substantial portion of their pre-orders has been driven by business needs, which is vital for these emerging EV companies as they navigate the high costs associated with ramping up production. The influx of corporate pre-orders not only provides financial support but also allows these companies to build brand recognition, especially since many have not seen remarkable consumer demand yet.
While Rivian successfully launched its first two vehicles, accumulating approximately 100,000 pre-orders, Canoo has remained relatively under the radar, with around 10,000 consumer orders. Fortunately, Canoo's strategy includes an additional 20,000 pre-orders for various businesses, providing a cushion for the startup over the coming year.
Conversely, Lucid, another EV startup, is not pursuing commercial vehicles and faces challenges due to a lack of demand. With an alarming burn rate of $2.6 billion annually, Lucid is under pressure to not only fulfill its pre-orders but also sustain demand once those orders are completed.
Thus, securing retail partnerships may prove critical for EV startups looking to overcome initial production challenges. Canoo benefits from its commercial vehicle being a modified version of its passenger van, while Rivian's vehicles are built on a unique architecture.
Section 1.2: Rivian's Production Advantage
Rivian's progress in production places it ahead of Canoo, raising concerns about Canoo's viability in the commercial EV sector. Rivian has raised an impressive $10.5 billion prior to vehicle deliveries, significantly outpacing Canoo's total of approximately $600 million. By the end of 2022, Rivian's available funds reached $12 billion, but it also spent around $6.7 billion in its effort to produce 25,000 vehicles last year.
Canoo, lacking the financial resources to match Rivian's spending, must navigate its production ramp-up carefully. However, the simplicity of Canoo's vehicle designs could facilitate a more straightforward manufacturing process. Nonetheless, the startup must initiate a marketing strategy to cultivate demand, as 10,000 consumer pre-orders will only sustain operations for a limited time.
Chapter 2: The Future of Retail and EVs
As companies like Walmart and Rivian enhance their electric vehicle initiatives, the future of retail logistics appears to be increasingly electric. This shift not only represents a significant transformation in delivery methods but also highlights the competitive landscape among retailers in the EV sector.
The first video titled "Crossing the Chasm: What Will Reignite EV Adoption in North America? | Coast-to-Coast EVs #14" dives into the factors that could revitalize electric vehicle adoption across North America, exploring the challenges and opportunities that lie ahead.
The second video, "Can VW & Rivian Save Each Other?! July's Almost Breaking News!" discusses the potential collaboration between major automotive players and the implications for the EV market's future landscape.