Rivian Automotive (RIVN 6.10%) investors already received good news during the third quarter when the electric vehicle (EV) manufacturer continued to work through production bottlenecks. As the company accelerated the use of its in-house motor line, it boosted production and pushed full-year guidance for the second quarter in a row -- up to 54,000 vehicles, which might prove conservative yet again.
Investors are in for even more good news as the company continues to ramp up its efforts in a different direction. Let's dig in.
The Rivian experience
Here's a quick review of just how strongly Rivian's production and deliveries have bounced back from the speed bump a few quarters ago.
Image source: Author. Information source: Rivian.
The production and delivery improvement was welcomed by investors, but the truth is, those improvements can only last as long as demand remains healthy. That's where management has focused recently, hoping it can create and sustain healthy demand in the quarters ahead.
What's the plan?
One path to creating healthy demand will be Rivian's demo-and-drive program. As the company invests in opening physical locations for potential customers to try out its vehicles, it opens the doors for word-of-mouth advertising and opportunities to rope in customers on the spot.
Since the end of the second quarter, Rivian has opened new demo-and-drive locations in Atlanta, Brooklyn, Chicago, Denver, Nashville, Seattle, and Vancouver, with more planned in the fourth quarter and through 2024.
Besides the demo-and-drive launches, Rivian vehicles have logged nearly 500 million miles, and the company will continue to build out its fast-charging network that currently has 57 Rivian Adventure Network sites. These initiatives could be a long-term competitive advantage that only Tesla can claim currently.
Growing its reach to new consumers, building out charging infrastructure, and adding more partnerships are all important. But Rivian's ability to service the growing number of its vehicles on the road is crucial to make sure that owning one is as positive an experience as possible to attract potential customers.
Currently, Rivian has 408 service vehicles on the road that can handle a majority of repairs. The company also has 45 physical service centers and will open nine more by the end of 2023. The ability to satisfy its current customer base shouldn't be overlooked by investors.
The bottom line
Rivian has made much progress in reducing its costs, improving its gross profit per unit, and continuing to accelerate its production and deliveries. However, while those strategies are crucial to its stock price, investors must also be aware of the often-overlooked intangibles, such as servicing its customer base and developing relationships with potential consumers.
The good news for Rivian investors is that the company seems to be making clear progress on all fronts, which bodes well for the health of its future demand and ability to satisfy its early adopters. These intangibles are more reasons to consider Rivian one of the top investments in the ever-evolving EV industry.
