Money-losing electric truck maker Rivian may be cutting costs, but there’s one area where it’s speeding up: opening brick-and-mortar retail showrooms as part of its growth plan.
Rivian debuted what it calls a Space retail and experience center at 60 10th Ave. in Manhattan’s trendy Meatpacking District, right underneath the High Line elevated park, a popular tourist destination. It’s a short walk from a slew of upscale destinations and shops, along with an Apple store, a major Google campus and the Whitney Museum of American Art.
The 5,000-square-foot location, Rivian’s first on the East Coast and only its second after a late 2021 opening in Venice Beach, California, showcases not only its flagship R1T and R1S electric vehicles and a collection of exclusive merchandise. There’s also lounge and activity spaces for children designed to be what Rivian said are “family friendly” and to be used for meetups. It’s part of a strategy of making its locations a family destination.
The Irvine, California-based company plans a collection of temporary and permanent showrooms across the country. Rivian is betting that the timing is right because demand for electric vehicles is growing, and the firm is trying to position its showrooms as community hubs.
“We want you to bring everybody,” Denise Cherry, Rivian’s senior director of facilities design and retail development, said in an interview. “We know that a car purchase is a collective experience. You want to bring your family and your kids or your friends or whomever. Everything is deliberately made to be as inclusive as possible. … What becomes really unique about this space is it’s the confluence of our preorder holders, our potential customers not just in New York City, but [those] that are traveling to New York City for work or play and want to stop at the High Line.”
The New York showroom is temporary space until Rivian opens its permanent New York location in Brooklyn’s Williamsburg neighborhood, where Cherry said many core customers and their families live. Rivian plans to open more than 10 locations in the United States and one in Vancouver, Canada, this year. And it’s mapping out plans for other locations beyond, with showrooms spanning about 3,000 to 5,000 square feet, Cherry told CoStar. The company is also scouring sites for a possible permanent retail site in the Meatpacking District.
“This is built into the way that we need to go to market,” Rivian Senior Director of Customer Engagement Tony Caravano said, adding more than 70% of its order holders are first-time electric vehicle buyers. “It’s allowing the customer to be educated. … There’s a ton of pent-up demand for the brand. The way to grow in the future is to make sure that we meet customers where they are. … Cornerstone locations like this become very important to the future plan of the business.”
Rivian’s not the first electric car maker to try to position its brand through newly designed dealerships. A Tesla electric car showroom is near the new 10th Avenue site, and other manufacturers including VinFast have given traditional car showrooms a modern take. The companies, sidestepping rules for automakers that require a dealership model, sell directly to buyers, often in upscale malls and other places with high foot traffic where their target customers may be.
But Rivian is giving the idea its own twist, including a theater and even a national park. Caravano said the Venice showroom serves a community gathering space that offers a sense of connection with other truck owners. Rivian plans to do the same thing with its Meatpacking and other future locations.
“What we learned in the Venice [location], and what we’ve learned with all of the events that we’ve hosted across the country over the last four years, is that there is a growing community that wants to be connected,” Caravano said. “We have seen the proliferation of clubs of owners who are creating experiences that look and feel like those that we have created. … [The retail location] is not simply about educating potential new customers. It’s also maintaining a really deep connection with our existing owners as well. That actually sets us apart.”
Where Rivian plans to open its future locations factors that in. It’s redeveloping a former historic gas station in Groveland, California, a gateway town to Yosemite National Park, into a rest stop featuring both its showroom and a charging outpost.
Other projects include turning the shuttered South Coast Theater on Pacific Coast Highway in downtown Laguna Beach, California, into a retail space with a cinema. An indoor-outdoor 10,000-square-foot site in Austin, Texas, will come with a green space and rooftop patio with panoramic views of the city, and direct access to a biking and running trail, according to Rivian. Other retail locations are slated to open this year in cities including Boston, Nashville, Atlanta, Denver, Seattle, and San Francisco.
“We’ve peeled away the formality that can be associated with automotive retail and focused on creating a relaxed, family-friendly environment that invites guests to stay awhile and discover at their own pace,” Cherry said in a statement.
Rivian’s plans to expand its retail presence came after its first opening in 2021 were halted until now in part because of the pandemic, Caravano told CoStar. Rivian had pulled a plug on a planned showroom in Chicago’s Fulton Market, CoStar News reported exclusively at the time.
Rivian, which saw its first customer vehicle roll off its production line in Normal, Illinois, in September 2021, is watching costs as it attempts to turn profitable. The company, which went public in November 2021 in one of the largest initial public offerings of all time with a reported valuation of $66.5 billion, has said it’s “simplifying” its “future product portfolio” and implementing a “company-wide cost transformation” program as part of its move to “ensure [its] cost structure is appropriate for supporting long-term sustained growth.”
For instance, Rivian laid off more than 800 employees earlier this year after a loss of $6.75 billion on $1.66 billion in revenue last year.
While global sales of electric vehicles have risen, Rivian has acknowledged in regulatory filings that it’s vying for sales in a “highly competitive” market, adding it expects rivalries among EV makers to “intensify” due to factors including increased demand, a regulatory push for alternative fuel vehicles, and volatility in gas prices.
Supply chain disruptions also may risk lowering production in its Normal factory, Rivian said, adding its ability to develop and make vehicles on schedule and on a large scale is still “unproven.”
Rivian is planning to open its second factory in Georgia as global electric car sales are expected to continue “strongly” this year after topping 10 million in 2022 to 14% of all new cars sold, up from 9% in 2021 and almost triple the 5% rate in 2020, according to a study by the International Energy Agency. U.S. electric car sales last year rose 55% to account for an 8% share of total sales, IEA said.
In its most recent quarterly filing with the Securities and Exchange Commission it noted that added demand has a downside: more competition. “As fleet operators begin transitioning to EVs on a mass scale, we expect that more competitors will enter the commercial fleet EV market,” Rivian said. Higher interest rates have also led to increased costs for vehicle loans, prompting several companies to change their pricing strategy and cut prices, a strategy Rivian said it may not have the same financial bandwidth to implement.
That “may result in lower vehicle unit sales and increased inventory, a loss of customers and a loss in future market share,” Rivian said.