Rivian Automotive, a startup company known for its innovative battery-electric vehicles, has introduced a new option for car buyers: leasing. This surprising addition to their lineup is aimed at increasing demand and may also indicate improvements in production.
According to the company, they have recently launched a leasing program in California, New York, Florida, and Texas. This program provides customers with the opportunity to experience the adventure of owning a Rivian vehicle while enjoying more flexibility.
This move is considered significant as it allows Rivian to tap into a section of the automotive market that relies heavily on leasing. Approximately 20% of new cars are leased, making it a popular choice among buyers.
While purchasing a vehicle with cash or borrowing money are alternative options, leasing offers distinct advantages. With a loan, buyers borrow the necessary funds and repay them to the bank over a period of 48 to 72 months. By the end of the loan term, the car becomes the buyer's property.
In contrast, leasing involves paying a monthly rate for a predetermined period. However, at the end of the lease agreement, the car does not automatically become the buyer's property. Instead, buyers have the option to purchase the vehicle by paying an additional amount. Otherwise, the leasing company will take back the car and handle its sale.
With the introduction of leasing as an ownership choice, Rivian is expanding its reach and accommodating the preferences of a wider range of car buyers. This development showcases their commitment to providing innovative solutions in the electric vehicle market.
The Benefits of Leasing with Rivian
When it comes to purchasing a car, financing the entire amount can often be a daunting prospect. That's where leasing comes in. With Rivian, buyers have the option to lease, which means they only have to finance the difference between the new price of the car and its projected end-of-lease value. This results in lower monthly payments, making it an attractive choice for those who prefer leasing over buying.
R1S SUV Reservations and Delivery Expectations
For individuals interested in reserving an R1S SUV from Rivian, the website currently states that delivery can be expected in 2024. While this may seem like a long wait, it's worth noting that Rivian has been working tirelessly to increase its production capacity.
Ramping Up Production
Rivian has made significant strides in ramping up its production numbers. In the third quarter, the company produced a record-breaking 16,304 units, surpassing the 13,992 units produced in the previous quarter of 2023. The goal for 2023 is to produce approximately 54,000 units, a substantial increase from the 24,300 units produced in 2022.
According to Wall Street analysts, deliveries in 2024 are expected to reach an impressive 69,000 units. It is anticipated that deliveries and production will closely align with each other.
Despite Rivian's positive production advancements, its stock has not seen a significant increase. In early trading on Tuesday, shares were down by 1% at $16.50. This decline is reflective of the general market trend, with the S&P 500 and Nasdaq Composite also experiencing a slight decrease of approximately 0.2%.
Over the past year, Rivian shares have seen a decrease of about 43%. This decline can be attributed to rising interest rates and concerns regarding the demand for electric vehicles. Many investors are cautious about putting their money into EV start-ups that have yet to generate profits.
Long-Term Profit Outlook
It is important to note that Wall Street does not anticipate Rivian to generate full-year profits for several more years. While this may be discouraging for some investors, it is essential to consider the long-term potential of the company.
For more information, please visit Rivian's website.