Rivian Automotive (NASDAQ: RIVN ) Has done a great job for itself. This sets it apart from most of the younger electric vehicles (EV). Beginnings It has joined the ranks of the EV industry’s long-term prospects for success.
Additionally, the company’s R1S and R1T vehicles have won numerous awards from JD Power and Consumer Reports, among others, helping to build a strong brand name and reputation for quality.
Now, the company is converting its used vehicles to another Revenue stream.
A new revenue stream
Rivian recently announced the launch of a pre-owned sales program for its R1T truck and R1S SUV, opening up a new avenue for revenue generation. This will be helpful as the company’s deliveries are expected to remain flat in 2024.
With the company closing in on its orders, current orders and deliveries with the launch of the much-anticipated and highly affordable R2 crossover, the company needs a way to generate more revenue. Starting a pre-owned queue is the next logical step.
“It’s almost mandatory if you want to be taken seriously,” said Evan Drury, a senior analyst at Edmonds. Automotive News. “For consumers to test the waters with brands they’ve never had experience with, you want a lot of things that inspire trust, and these programs speak to that.”
What does the move do?
Along with opening up a new revenue stream, this is the next logical step for the maturing brand, especially since the company launched its leasing program about 10 months ago. With these vehicles coming in, the company found a way to make them more profitable again. That’s a move too Tesla It was produced in 2015 when it started selling pre-owned Model S vehicles.
Price-sensitive customers may appreciate this move. For example, on Rivian’s website, it offers a pre-owned R1T with an original sticker price of $87,000. More good news for Rivian is that pre-owned EVs are in demand—considering the depreciation of a new EV is worse than gasoline-powered or hybrid vehicles.
Also, pre-owned programs are known to increase profits as retailers can mark up their vehicles above market for consumer convenience. Customers are assured of comprehensive inspections and get the remainder of the factory warranty. “A pre-owned program benefits everyone but your competition,” Drury said.
Used EVs are selling much faster now than they were a year ago, which shows that consumer demand is at the right price. Unfortunately, the right price is obviously lower than what many new EVs can currently achieve.
What does it all mean?
The move to launch a pre-owned program is especially important when considering the upcoming R2 crossover, which will lead to several valuable trade-ins of its first-generation R1T and R1S as customers step into the new vehicle.
It’s a bit of good news at a time when deliveries to Rivian are stalling. As it waits for the R2 crossover to boost sales, it is looking for ways to generate new revenue and capitalizing on its strong initial trade-in and leasing program.
Should you invest $1,000 in Rivian Automotive now?
Before buying shares in Rivian Automotive, consider this:
The Motley Fool Stock Advisor The research team identified what they believe 10 Best Stocks Investors can buy now… and Rivian Automotive isn’t one of them. The 10 stocks that are cut can generate huge returns in the years to come.
Consider when Nvidia Made this list on April 15, 2005… If you invested $1,000 during our referral, You will have $760,130!*
Equity Advisor Guidance on building a portfolio provides investors with an easy-to-follow roadmap for success, including regular updates from analysts and two new stock picks each month. The Stock Advisor Service is available More than four times The S&P 500 has rebounded since 2002*.
*Stock Advisor returns on September 23, 2024
Daniel Miller No position in any of the shares mentioned. The Motley Fool has and recommends positions on Tesla. A motley fool Disclosure Policy.
A bit of good news for Rivian investors Originally Posted by The Motley Fool
2024-09-28 17:45:00