by - EV startups could lose customers while making people wait.
- Without agents, startups learn new lessons in customer service.
- While startups ramp up production, legacy companies could benefit.
Philip Pao placed an order for a Rivian R1T in November 2019. After three years of waiting, he decided it was time to make a backup plan.
He placed an order in a Toyota truck with gas and now it’s a race to see who will deliver to him first in Fairfax, Virginia. (Rivian is likely to lose. The company says it can’t give it a delivery window until April.)
“At this point I’ve pretty much made up my mind,” Pao said, “I’m just going to cancel my order with Rivian.”
For Pao and others like him, waiting for an electric vehicle has turned into something of a betting game.
Customers are hedging their bets with orders for vehicles from many companies, from startups like Rivian to legacy companies like Ford and Toyota. While they sit in a virtual queue – sometimes for years – the new differentiator for some order holders is the level of customer service they receive while they wait.
“This is the less glamorous side of the business, but for a new brand it’s just as important as the fun part of designing and prototyping,” said Jessica Caldwell, auto analyst at auto shopping website Edmunds. “The longer the wait goes on and other products come in, the easier it is to switch brands.”
EV startups learn customer service
Electric vehicle startups are learning a hard lesson in customer service, Caldwell said, as they try to keep would-be buyers on the hook for years. That’s a huge difference from the way cars were sold historically — when a big-money salesman aims to take you home with a new car that day.
Startups like Rivian have taken a page out of Tesla’s playbook by shunning retail locations and dealer networks. This gives companies direct access to their customers and more control over their prices, but it can also create friction between a brand and its new batch of customers.
As startups deliver more, they are de-emphasizing long order queues – something that was once a point of pride. Both Rivian and Lucid stopped reporting pre-order numbers to earnings investors in recent weeks.
While it’s important for EV startups to take care of customers after delivery, some of those order holders are just as important to keep on your side, Caldwell said.
“Those are the early adopters — the people in the friend group who give advice on EV purchases,” Caldwell said. “Having these people on your side is so important when you have to compete with companies like General Motors and Ford, who have much bigger and deeper advertising pockets.”
Some of Rivan’s order holders are losing hope
Insider has spoken to or corresponded with nearly three dozen current and former Rivian order holders over the past few months.
Several said the company offered test drives in their area over the past year to encourage them to remain patient. But for many (who are often also shareholders dating back to the company’s blockbuster IPO), it’s the falling share price, the wait and now for the company to return to its early promises.
The final straw for Pao was Rivian’s failure to deliver the Max pack, a 400-mile range battery, with the four-wheel drive this year. Once this change was made, Pao received a notification that he would receive a new delivery window estimate, for a dual-engine vehicle, at the end of February, but this has been pushed back to April.
“I want what you’ve been marketing all along,” Pao said. “The only thing that can win back my trust is if they produce what they intended to produce.”
Rivian has previously said the timing of deliveries “is based on a number of factors, including delivery location, configuration and original pre-order or reservation date.” A spokesperson also said customers experiencing delays have been connected to customer service.
When Rivian first started taking orders, it touted an impressive 400-mile battery range for its pickup and SUV, all of which made it unique among others that hadn’t yet entered those categories and certainly didn’t meet that range.
Fast forward several years, and other automakers offer similarly attractive products with a range that rivals what Rivian currently has to offer with EPA ratings ranging from 314 to 320 miles per charge: Ford’s F-150 Lightning pickup offers range of 320 miles on the extended range package, the Chevrolet Silverado electric truck is estimated to have a range of 400 miles, and the Hyundai Ioniq 5 SUV has an advertised range of 303 miles.
Wade Higgins, a former Rivian employee who also has an order for an R1S, had a tip for other people waiting in line: “One of the things you really need to know is: What configuration do you want?
“If you want your vehicle right away, you need some flexibility in getting what they’re building right now,” he said, “and if you’re very stuck on getting exactly what you want, you need to be patient.”
Are you a current or former Rivian employee, Rivian vehicle owner or Rivian order holder? Contact these reporters at nnaughton@insider.com and astjohn@insider.com.
