EV Recurring Revenue from Connected Services | PYMNTS.com

Electric vehicle maker Rivian says its vehicles will come with connected services that will span the vehicle’s entire lifecycle, deepen relationships with its customers, and provide recurring monthly subscription revenue.

These services will include a fleet management platform for commercial vehicles and a suite of membership services for consumer vehicles, the company said on Dec. 16 in its first public enterprise earnings call.

“Our consumer and commercial products are supported by a full suite of value-added services that span the entire vehicle lifecycle and deepen our customer relationships,” Rivian CEO RJ Scaringe said at the call. “From a blank sheet of paper, we have built a vertically integrated ecosystem comprised of our vehicle technology platform, our cloud architecture, our product and operational development capabilities, our products and services. “

Design commercial vehicles with Amazon

Rivian raised $ 13.7 billion in gross proceeds during its initial public offering (IPO) in November. The company delivered its first pickup truck in September and its first sport utility vehicle in December. It will soon deliver its first commercial delivery van, the EDV, which was designed and manufactured in collaboration with Amazon.

Amazon has ordered an initial volume of 100,000 EDVs worldwide, subject to change. Every utility vehicle sold to Amazon is complemented by FleetOS, Rivian’s proprietary fleet management platform that offers recurring monthly subscription fees.

“FleetOS, this fleet management platform that we are launching with the first vehicles that will be delivered with Amazon, and it will be present with every vehicle that we sell, as a recurring monthly fee, this also applies to from other use cases. Jiten Behl, director of growth at Rivian, said on the call.

Rivian FleetOS is a proprietary management platform that helps optimize and automate fleet operations to help managers improve their total cost of ownership and maximize uptime. It offers cloud-based tools that are accessible on multiple devices. The platform facilitates comprehensive routing monitoring, remote diagnostics, crash reports and helps improve driver safety and supervision. It offers tools and dashboards that provide insight into the health, performance, service, load, and usage of fleets at any scale.

“The scalability of this fleet management platform, the flexibility, the modularity of it, gives us many opportunities to develop the service side of the business on the business side,” Behl said. “So this is another unlock of value, long term value that we have launched. “

Offer a basket of features to consumers

A consumer software and service offering called the Rivian Membership is included with each of Rivian’s consumer vehicles. It is free for the first year and incurs a monthly fee thereafter.

“This would represent a feature set that will include, but not be limited to, charging, roadside and connectivity,” Behl said. “There will be other elements in this membership offering that we are working on and that we diligently maintain and design.”

There will also be other types of software subscriptions offered individually or in packs, he added.

“We have also seen strong uptake when it comes to our insurance and vehicle financing,” CFO Claire Rauh McDonough said on the call. “Given the truly seamless experience – you can go through our transactions to the delivery process in minutes – the ease of use and simplification of that process really showed in terms of take rate, especially on these two cutting edge features which are also part of this initial transaction.

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