- EV startups could lose customers while they make people wait.
- Without dealers, startups are learning new lessons in customer service.
- While startups ramp up production, legacy companies could benefit.
He placed an order on a gas-powered Toyota pickup truck, and now it’s a race to see who will deliver to him in Fairfax, Virginia first. (Rivian is likely to lose. The company says it can’t give him 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 Rivian order.”
For Pao and others like him, waiting on an electric vehicle has turned into a betting game of sorts.
Customers are hedging their bets with orders for vehicles from multiple companies, from startups like Rivian to legacy companies like Ford and Toyota. While they sit in a virtual queue — sometimes for years — the new difference-maker for some order holders is the level of customer care they get 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, an automotive analyst for car-shopping website Edmunds. “The longer the wait goes on, and other products come along, it’s easier to switch brands.”
EV startups learn customer service
Electric vehicle startups are learning a tough lesson in customer service, Caldwell said, as they try to keep would-be buyers on the hook for years on end. That’s a stark difference from the way cars have been sold historically — when a salesperson on a lot is aiming to get you home in a new car that day.
Startups like Rivian have taken a page out of Tesla’s book, eschewing brick-and-mortar retail locations and dealership networks. This gives companies direct access to their customers and more control over their pricing, but it can also create friction between a brand and its new batch of customers.
As the startups make more deliveries, they’re taking emphasis off of lengthy order queues — something that used to be a bragging right. Both Rivian and Lucid stopped reporting pre-order numbers to investors at earnings in recent weeks.
While it is important for EV startups to take care of customers after delivery, some of these order-holders are just as important to keep on your side, Caldwell said.
“These are the early adopters — the people in the friend group giving out EV shopping advice,” Caldwell said. “Having those people in your fold is so important when you have to compete with the likes of General Motors and Ford, which have much bigger, deeper advertising pockets.”
Some of Rivan’s order-holders are losing hope
Insider has spoken or corresponded with nearly three dozen current and former Rivian order holders in recent months.
Several said the company offered test drives in their area over the past year, to encourage them to stay patient. But for many (who are often also shareholders that date back to the company’s blockbuster IPO), it’s the stock price sinking, the wait, and now the company going back on early promises that sting.
The final straw for Pao has been Rivian’s inability to deliver the Max pack, a 400-mile range battery, with the quad-motor this year. Once that change was made, Pao received a notice that he would get a new delivery window estimate, for a dual-motor vehicle, in late February, but that has been delayed to April.
“I want what you’ve been marketing from the beginning,” Pao said. “The only thing that can gain my trust back is if they produce what they intended on producing.”
Rivian has previously said timing of deliveries is “based on a number of factors, including delivery location, configuration and original preorder or reservation date.” A spokesperson also said customers experiencing delays have been connected with customer service.
When Rivian first started taking orders, it touted the impressive 400-mile battery for its pickup and SUV, all of which made it unique among others who hadn’t yet entered those segments and certainly not met that range.
Fast-forward several years, and other automakers are offering similarly-enticing products with range that rivals what Rivian currently has to offer at an EPA rating ranging from 314 to 320 miles per charge: Ford’s F-150 Lightning pickup touts a 320-mile range on the extended range pack, the Chevrolet Silverado electric truck is estimated to have a 400-mile range, 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 piece of advice for other people waiting in the queue: “One of the things that you really need to be cognizant of is: What configuration do you want?
“If you want your vehicle immediately, you need some flexibility in taking what they’re manufacturing right now,” he said, “and if you are super dead-set on getting exactly what you want, you need to be patient.”