Rivian R1T electric pickup concept
Electric cars worry traditional car dealerships.
Tesla sells cars nationwide without dealers—even if buyers have to drive over state lines to get them in some cases. Electric cars eat into one of dealerships’ main profit centers, service, because they don’t need oil changes, spark plugs, or even air filters. And traditional dealerships have trouble selling electric cars; many have trouble even keeping them charged and ready for buyers to test drive.
That’s why Rivian, the Michigan-based startup planning to sell a new electric pickup and SUVs, doesn’t plan to have traditional dealers.
As with Tesla, buyers will order directly from the company. Unlike Tesla, though, Rivian does plan to have dealerships, though they’ll only be for service and support.
Rivian plans to launch an electric pickup with a 400-mile range in 2020 and follow it with a seven-passenger electric SUV in 2021.
Speaking with Green Car Reports and Motor Authority at the LA Auto Show, Rivian founder and CEO R.J. Scaringe said the company will open service dealerships to support its trucks, but will sell them directly to consumers.
The internet, he says, has brought consumers more knowledge than ever before about the vehicles they’re buying and virtually put an end to haggling. With most cars selling at rock-bottom prices, it has cut into dealerships’ bottom line in sales—which has never been one of their more profitable lines of business anyway.
“The existing dealers are all recognizing that there are changes happening to their business,” Scaringe told Motor Authority. “There are aspects of what the dealers do that don’t get talked about enough,” he says, namely sales and service.
To that end, Scaringe says Rivian has received a lot of interest from dealers in becoming the company’s service and support centers. which will allow them to focus on aspects of their business that are most successful.
He didn’t provide any more details about where the dealerships will be located or how consumers will receive cars directly from Rivian, so it’s not clear whether the company could face some of the same legal hurdles in some states where Tesla has run into obstacles from traditional dealerships lobbying to prevent the company from opening its sales stores or delivering cars.