Rivian Charging Ahead

Abstract

In fall 2021, start-up Rivian was poised to begin delivery of its first electrical vehicles (EVs) to external customers after several delays. The company had over 70,000 preorders for its R1T (pickup truck) and R1S (SUV) models. On November 11, the company went public, raising approximately $12 billion in the largest US IPO since Facebook. Early investors were bullish on Rivian. The company's success would depend in part on the availability of charging stations. Rivian had plans to establish two networks of chargers in the United States and Canada. Rivian Adventure Network would be a network of Level 3 DC fast chargers, while Rivian Waypoints would be Level 2 AC chargers. The company had announced that it wanted to establish these networks in locations near national parks and locales it expected its customers to visit. Rivian was targeting consumers who were outdoor enthusiasts. The case describes EV charging options and challenges students to determine where Rivian should locate its charging stations, how many were needed, and what types were best to serve consumers traveling the 469-mile Blue Ridge Parkway. Ultimately, this is not simply a problem seeking an “optimized solution” given predicted demand, but one that will fundamentally shape emerging consumer behavior.This case is taught in Operations Management, a required first-year course at Darden School of Business. It can also be used in a second-year elective course that explores the major issues and managerial concepts relating to strategic management of the operations function in today's global economy. The set includes a series of short video interviews with the case protagonist.

Excerpt

UVA-OM-1749

Rev. Jul. 7, 2022

Rivian Charging Ahead

As head of Consumer Energy Solutions for electric vehicle start-up Rivian, Adam Happel (MBA '08) had come to expect the unexpected on a daily basis. Rivian had designed two vehicles targeted to outdoor enthusiasts: a pickup truck called R1T and a sport utility vehicle (SUV) called R1S (see Exhibit1). First deliveries to customers were initially scheduled for 2020, but the COVID-19 pandemic pushed the delivery dates to the fall of 2021.

Happel was in charge of consumer energy and charging solutions. This meant that he was accountable for customers who purchased a home-charging station for their Rivian vehicle, and with vehicles soon to be delivered to customers, Happel was, to say the least, very busy.

Meanwhile, the company was moving ahead with plans to create networks of charging stations across the United States and Canada. While the rollout of these networks was not Happel's direct responsibility, it did affect his marketing plans for home-charging products. Given his ties to Virginia, he was particularly interested in how Rivian would build out the charging network along the Blue Ridge Parkway. Where should the charging stations be located? How many charging stations were needed? What types of chargers should the company install? How should the leadership be thinking about these options? These questions were swirling around Happel's mind.

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Keywords: sustainability, clean energy, environment, electric vehicles, charging stations, infrastructure, Crozet, Charlottesville, SUVs, EVs, queuing theory, coefficient of variation, charging network, strategic tradeoffs, Little's Law, scale economies