Rivian Discussion: A Business Case for Software Differentiation

J's Rivian

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Rivian
2021 Gen 1 R1T
There's been a lot of discussion lately about different software for different trim levels of truck. People arguing for Rivian to provide special features for certain models, and others arguing for giving all trucks the same truck. I'm going to take this opportunity to explain why Rivian should provide different software based on the pricing tiers of the various trucks. It makes business sense.

First off, we can all agree that there is a wide range of appeals here when it comes to the R1 series vehicles. People want different things out of these vehicles, and as such Rivian needs to figure out a way to motivate people to move up into more expensive vehicles. I have cone across a lot of owners with quad motor trucks that aren't at all motivated by the extra horsepower. I have seen how some people have melted off their tires and others are getting over double or triple the miles out of the same tires with the same vehicle. Obviously that comes from people who aren't using all 835HP.

If you were RJ how would you get people like that to buy your more expensive trucks? Surely some of these people who do not need the power could and would still purchase the more expensive vehicle if there were another reason to do so. There are two ways. The first is to make the price not that much more between the different trims. People might move up simply because an extra 1500 dollars is worth the nicer badges and the thought of having extra power even if they won't use it. At an 8K dollar price delta between a plain dual and a quad that gulf is too great for this to reliably work. The other way is to offer different features that are package exclusive. Most manufacturers do this. If you want the premium stereo you need the leather seats or the premium 2 package with a bunch of other features. Rivian can do this with software like gauges.

They really need to do this if they plan on selling a lot more of the max packs. The price difference of those is pretty extreme just like the dual performance max which is currently amongst the most expensive configuration. So if Rivian wants to sell those, presumably they make a good profit on a max pack, they are going to need to offer some extra software modes or something. I wouldn't spend the money on a max pack because the range isn't enough for my use. If they want to entice buyers to their more profitable packages Rivian will need to provide that value to the end user.
 

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