Like most electric vehicle startups in the early phase, Rivian has openly struggled with profitability. It’s had a hard time scaling up, generating enough pieces and parts to get trucks out of its Normal, Ill. factory and into customers’ driveways and trailheads. Thus, EV pundits and investors alike have called the brand’s future into question; will it stick around without volume? But it looks like things may be picking up. Rivian has announced that it’s rolling out a leasing program. It might be the biggest sign that the company’s finally on the upswing.
The leasing program is open to the Rivian R1T to start, according to the company, because its production has scaled up enough to do so. It appears that all of the lease-eligible trucks are the 835 horsepower quad-motor R1Ts with the adventure package, 328-mile large pack battery, premium paint, premium interior, and premium wheels. It’s a three-year, 30,000-mile lease good for $899 a month after the $6,794 due at signing.
Because it is a lease, the units qualify for the full $7,500 tax credit despite the MSRP of these trucks stickering in at a whopping $95,800. That credit will be likely wrapped into the lease to help defray costs.
Rivian’s leasing program isn’t quite nationwide yet. Initially, Rivian will start in 14 states: Arizona, California, Colorado, Florida, Georgia, Massachusetts, Michigan, Missouri, New Jersey, New York, Nevada, Pennsylvania, Texas and Washington. Also, it’s only available on the pickup R1T; the R1S will have to wait. It’s also only for those select, currently built configurations, not custom-ordered models. Rivian says that it plans to add more states, the R1S, and custom configurations very soon.
By comparison, a Ford Lightning Platinum would sticker for about the same price as the R1T, but its lease payment could be well into the $1,000 mark, with more due at signing. Rivian’s lease deal isn’t so bad, provided you’ve got the dough to make an $899 lease payment every month.
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Listen, I’m not Dave Ramsey and I’m not going to armchair quarterback anyone’s financial car-buying decisions, but the fact of the matter is that leasing is very important to the premium market segment that Rivian plays in. Although leasing only makes up about 20% of all new cars sold, that proportion changes significantly when it comes to premium brands.
According to CarTelligent, the number of leases of cars from BMW, Mercedes-Benz, and Audi can touch as high as 77% of the brand’s buyers. Honestly, it’s kind of a miracle that Rivian’s made it this far without any provisions for leasing.
Importantly, this shows that Rivian may just be ready to finally deliver on the volume it’s been chasing ever since it started making trucks. And this year has been a mixed bag for Rivian. It’s struggled with software issues on its trucks, as well as layoffs and losses partially related to its ability to produce trucks. But it’s made moves to get past that, like finally getting its dual-motor Enduro trucks to market—something Rivian says is key to scaling its operations. Its Q3 results were so good that Rivian adjusted its production outlook upward for the end of the year.
If Rivian’s lease numbers play similar to established legacy premium automakers, leasing could be a real boon to the somewhat troubled EV startup.