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Thanks to Tesla, Rivian is exploiting a gap in the market — and shipping a lot more vehicles.
Have you been seeing Rivians on the street more often? Well, I have. Even on Brooklyn’s narrow and parking-deprived streets, these luxury trucks and SUVs — the look of which seems to split the difference between “rolling over a field of human skulls under the direction of Skynet” and “Pixar” — are making more of an appearance. I don’t think I’m imagining things either: The ballyhooed electric vehicle manufacturer has in fact seen a surge of shipments this year.
In the second quarter, Rivian produced 13,992 vehicles and delivered 12,460 of them, bringing its total for the first six months of the year up to 23,387 vehicles made and 20,586 delivered. That’s compared to 24,337 produced and 20,332 delivered in all of 2022.
The company said Tuesday that it expects to produce 52,000 total units this year, up slightly from its previous 50,000 estimate. It’s still burning money, though. Using its preferred earnings measure, it expects to lose $4.2 billion this year while pouring $1.7 billion into capital expenditures. Its net loss in the second quarter was $1.2 billion.
“As more and more vehicles are on the roads — and we now have tens of thousands of R1s on the roads — it continues to feed the flywheel of awareness about the brand,” Rivian chief executive R.J Scaringe said on the company’s earnings call Tuesday. “Some of our strongest advocates are people that are driving our vehicles every day. And so we’re quite bullish on the continued strong demand we have for our products.”
In the United States, Tesla still dominates the EV market, and Rivians have only recently even shown up in the data or on the streets in a meaningful way. Rivian’s consumer products (they also sell vans to Amazon) are unabashedly luxury trucks and full-size SUVs, cutting the company off from the crossover and mid-size EV market that Tesla has dominated. But while the size of the potential market is smaller than the niche filled by the Tesla Model Y, it’s one that Tesla has left open, with its delay in refreshing its model lineup and unclear timeline for sales of its Cybertruck.
According to data collected by Morgan Stanley, there were 2,200 R1Ts, (Rivian’s pickup truck) and 2,100 hundred R1Ss (its SUV) sold in June of this year, compared to 1,867 and 200 respectively last year. By contrast, there were over 33,000 Tesla Model Ys sold in June 2023 and 24,640 sold in June 2022.
Ford has sold almost 32,000 electric vehicles so far this year, including 10,309 F-150 Lightnings, the electrified version of its best selling pick-up truck.
That Tesla dominates the American EV market is hardly surprising — the unmatched brand awareness has become supercharged by aggressive pricing (aided by Inflation Reduction Act subsidies), turning its Model Y SUV and Model III sedan into something like “normal” cars.
Tesla’s ubiquity may have begun to trade off with its luxury or exclusive status, Morgan Stanley analyst Adam Jonas has argued: “A car is an expression of personal style and values. Many luxury car buyers want an attractive alternative to the ubiquitous Tesla,” he wrote in a July note to clients.
And that luxury is something customers are paying for. The R1S SUV starts at $78,000, while the R1T starts at $73,000. The F-150 Lighting, on the other hand, is listed closer to $50,000 (although in reality it typically ends up being much more expensive), while the luxury Tesla Model X starts at around $100,000. Lucid, another small electric automaker, is also competing in the unabashedly luxury space, with its sedan the Air starting at around $80,000 and an upcoming SUV the Gravity that is supposed to go on sale sometime next year. Other luxury brands like Cadillac, Mercedes, Audi, and BMW also have electric SUVs and crossovers on the market.
The Tesla model lineup, on the other hand, has not been refreshed meaningfully in years and its Cybertruck, which would compete directly with the R1T, remains unreleased to the general public with an unclear timeline for when it will be. The R1S, on the other hand, literally outsizes the crossovers and mid-size SUVs in the Tesla lineup, the Model Y and Model X.
“You can definitely tell Rivian hired a lot of former Tesla employees. The software and vehicle controls feel very Tesla-like. Rivian fit and finish feel superior to Tesla in just about every way,” Chris Hilbert, a Rivian R1S (and Model S) owner in Fishers, Indiana, told me. “The driving experience is really great — the vehicle has so much room and utility. We recently piled five kids and two adults into it for a road trip to Michigan. The luggage and kids stuff I got into it was nothing short of impressive.”
Hilbert noted, however, that Tesla’s software and driver-assist capabilities are more advanced and its service is available in more places across the country: “That’s a big issue for Rivian right now — service locations and availability. Many potential buyers have balked due to the lack of service centers.”
In short, Rivian has proven in the last year that they can be a company that makes cars that customers want and can get delivered to customers. What remains to be seen if it really wants to compete with Tesla is whether it can be the combined automobile, software, and services company that contemporary EV buyers expect, let alone a profitable one that investors want too.
In the meantime, Hilbert has also put in an order for a Cybertruck.
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A conversation with VDE Americas CEO Brian Grenko.
This week’s Q&A is about hail. Last week, we explained how and why hail storm damage in Texas may have helped galvanize opposition to renewable energy there. So I decided to reach out to Brian Grenko, CEO of renewables engineering advisory firm VDE Americas, to talk about how developers can make sure their projects are not only resistant to hail but also prevent that sort of pushback.
The following conversation has been lightly edited for clarity.
Hiya Brian. So why’d you get into the hail issue?
Obviously solar panels are made with glass that can allow the sunlight to come through. People have to remember that when you install a project, you’re financing it for 35 to 40 years. While the odds of you getting significant hail in California or Arizona are low, it happens a lot throughout the country. And if you think about some of these large projects, they may be in the middle of nowhere, but they are taking hundreds if not thousands of acres of land in some cases. So the chances of them encountering large hail over that lifespan is pretty significant.
We partnered with one of the country’s foremost experts on hail and developed a really interesting technology that can digest radar data and tell folks if they’re developing a project what the [likelihood] will be if there’s significant hail.
Solar panels can withstand one-inch hail – a golfball size – but once you get over two inches, that’s when hail starts breaking solar panels. So it’s important to understand, first and foremost, if you’re developing a project, you need to know the frequency of those events. Once you know that, you need to start thinking about how to design a system to mitigate that risk.
The government agencies that look over land use, how do they handle this particular issue? Are there regulations in place to deal with hail risk?
The regulatory aspects still to consider are about land use. There are authorities with jurisdiction at the federal, state, and local level. Usually, it starts with the local level and with a use permit – a conditional use permit. The developer goes in front of the township or the city or the county, whoever has jurisdiction of wherever the property is going to go. That’s where it gets political.
To answer your question about hail, I don’t know if any of the [authority having jurisdictions] really care about hail. There are folks out there that don’t like solar because it’s an eyesore. I respect that – I don’t agree with that, per se, but I understand and appreciate it. There’s folks with an agenda that just don’t want solar.
So okay, how can developers approach hail risk in a way that makes communities more comfortable?
The bad news is that solar panels use a lot of glass. They take up a lot of land. If you have hail dropping from the sky, that’s a risk.
The good news is that you can design a system to be resilient to that. Even in places like Texas, where you get large hail, preparing can mean the difference between a project that is destroyed and a project that isn’t. We did a case study about a project in the East Texas area called Fighting Jays that had catastrophic damage. We’re very familiar with the area, we work with a lot of clients, and we found three other projects within a five-mile radius that all had minimal damage. That simple decision [to be ready for when storms hit] can make the complete difference.
And more of the week’s big fights around renewable energy.
1. Long Island, New York – We saw the face of the resistance to the war on renewable energy in the Big Apple this week, as protestors rallied in support of offshore wind for a change.
2. Elsewhere on Long Island – The city of Glen Cove is on the verge of being the next New York City-area community with a battery storage ban, discussing this week whether to ban BESS for at least one year amid fire fears.
3. Garrett County, Maryland – Fight readers tell me they’d like to hear a piece of good news for once, so here’s this: A 300-megawatt solar project proposed by REV Solar in rural Maryland appears to be moving forward without a hitch.
4. Stark County, Ohio – The Ohio Public Siting Board rejected Samsung C&T’s Stark Solar project, citing “consistent opposition to the project from each of the local government entities and their impacted constituents.”
5. Ingham County, Michigan – GOP lawmakers in the Michigan State Capitol are advancing legislation to undo the state’s permitting primacy law, which allows developers to evade municipalities that deny projects on unreasonable grounds. It’s unlikely the legislation will become law.
6. Churchill County, Nevada – Commissioners have upheld the special use permit for the Redwood Materials battery storage project we told you about last week.
Long Islanders, meanwhile, are showing up in support of offshore wind, and more in this week’s edition of The Fight.
Local renewables restrictions are on the rise in the Hawkeye State – and it might have something to do with carbon pipelines.
Iowa’s known as a renewables growth area, producing more wind energy than any other state and offering ample acreage for utility-scale solar development. This has happened despite the fact that Iowa, like Ohio, is home to many large agricultural facilities – a trait that has often fomented conflict over specific projects. Iowa has defied this logic in part because the state was very early to renewables, enacting a state portfolio standard in 1983, signed into law by a Republican governor.
But something else is now on the rise: Counties are passing anti-renewables moratoria and ordinances restricting solar and wind energy development. We analyzed Heatmap Pro data on local laws and found a rise in local restrictions starting in 2021, leading to nearly 20 of the state’s 99 counties – about one fifth – having some form of restrictive ordinance on solar, wind or battery storage.
What is sparking this hostility? Some of it might be counties following the partisan trend, as renewable energy has struggled in hyper-conservative spots in the U.S. But it may also have to do with an outsized focus on land use rights and energy development that emerged from the conflict over carbon pipelines, which has intensified opposition to any usage of eminent domain for energy development.
The central node of this tension is the Summit Carbon Solutions CO2 pipeline. As we explained in a previous edition of The Fight, the carbon transportation network would cross five states, and has galvanized rural opposition against it. Last November, I predicted the Summit pipeline would have an easier time under Trump because of his circle’s support for oil and gas, as well as the placement of former North Dakota Governor Doug Burgum as interior secretary, as Burgum was a major Summit supporter.
Admittedly, this prediction has turned out to be incorrect – but it had nothing to do with Trump. Instead, Summit is now stalled because grassroots opposition to the pipeline quickly mobilized to pressure regulators in states the pipeline is proposed to traverse. They’re aiming to deny the company permits and lobbying state legislatures to pass bills banning the use of eminent domain for carbon pipelines. One of those states is South Dakota, where the governor last month signed an eminent domain ban for CO2 pipelines. On Thursday, South Dakota regulators denied key permits for the pipeline for the third time in a row.
Another place where the Summit opposition is working furiously: Iowa, where opposition to the CO2 pipeline network is so intense that it became an issue in the 2020 presidential primary. Regulators in the state have been more willing to greenlight permits for the project, but grassroots activists have pressured many counties into some form of opposition.
The same counties with CO2 pipeline moratoria have enacted bans or land use restrictions on developing various forms of renewables, too. Like Kossuth County, which passed a resolution decrying the use of eminent domain to construct the Summit pipeline – and then three months later enacted a moratorium on utility-scale solar.
I asked Jessica Manzour, a conservation program associate with Sierra Club fighting the Summit pipeline, about this phenomenon earlier this week. She told me that some counties are opposing CO2 pipelines and then suddenly tacking on or pivoting to renewables next. In other cases, counties with a burgeoning opposition to renewables take up the pipeline cause, too. In either case, this general frustration with energy companies developing large plots of land is kicking up dust in places that previously may have had a much lower opposition risk.
“We painted a roadmap with this Summit fight,” said Jess Manzour, a campaigner with Sierra Club involved in organizing opposition to the pipeline at the grassroots level, who said zealous anti-renewables activists and officials are in some cases lumping these items together under a broad umbrella. ”I don’t know if it’s the people pushing for these ordinances, rather than people taking advantage of the situation.”