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Table of contents
Introduction ................................................................................................................................................. 3
External Analysis ........................................................................................................................................ 4
Porter’s 5 Forces ................................................................................................................................... 4
Threat of New Entrants ....................................................................................................................... 4
Bargaining Power of Buyers ............................................................................................................... 5
Threat of Substitutes ........................................................................................................................... 5
Rivalry among Existing Competitors.................................................................................................. 6
PESTEL Analysis .................................................................................................................................. 6
SWOT Analysis .......................................................................................................................................... 9
Strength .................................................................................................................................................. 9
Weakness ............................................................................................................................................... 9
Opportunities....................................................................................................................................... 10
Threat ................................................................................................................................................... 10
Competitor Analysis ................................................................................................................................. 10
Corporate Level Strategy .......................................................................................................................... 12
Joint Venture ....................................................................................................................................... 12
Quasi Integration ................................................................................................................................ 12
Vertical Integration ............................................................................................................................ 13
Plans for Expansion ............................................................................................................................ 13
Business Level Strategy ............................................................................................................................ 14
Value Innovation ................................................................................................................................. 14
Red Ocean Strategy ............................................................................................................................ 15
Competitive Advantage through Business Strategy ........................................................................ 15
Functional Level Strategy ......................................................................................................................... 16
Zero Carbon Emissions Functional Strategy ................................................................................... 16
Waste Management’s Functional Strategy ....................................................................................... 16
Competitive Advantage through Functional Activities ................................................................... 17
Achieving Superior Efficiency ......................................................................................................... 17
Good Ethical Activities of Rivian ............................................................................................................. 18
Environmental Responsibility............................................................................................................ 18
Supplier Relationship ......................................................................................................................... 19
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Employee Well-Being.......................................................................................................................... 20
Bad ethics of Rivian .................................................................................................................................. 20
Breach of Corporate Social Responsibilities .................................................................................... 20
Construction Site Brought Fouling Water To The Neighborhood ................................................. 21
Discriminations ................................................................................................................................... 21
Unfair commercial Practices .............................................................................................................. 21
Violation of employee rights .............................................................................................................. 23
Recommendations ..................................................................................................................................... 23
References ................................................................................................................................................. 26
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Introduction
Rivian Automotive, Inc. is a US established company that specializes in manufacturing electric vehicles
SUV and pickup truck. It was first introduced in 2009 by Rober “RJ” Scaringe. Previously the company
was named Mainstream Motors. The headquarters is located in Irvine, California, U.S. They have been
serving their product and service mostly in North America with 51 service centers and 14,122 total
employees. As they manufacture electric vehicles as their core product, they also manufacture and sell
batteries for their vehicles. The company focuses on producing high quality eco-friendly vehicles ensuring
convenience as well as to build trust among the end-users, they have been trying to position themselves
as an eco-friendly concern vehicle manufacturing company which works to ensure the overall
sustainability of the environment.
The main objective of Rivian is to encourage people to move towards sustainable vehicles by introducing
most efficient and convenient electric vehicles that deliver exceptional performance, functionality and
adventure. They further ensure the users to explore with full freedom while being environmentally
conscious. The vision of Rivian is leading to sustainable mobility where electric vehicles will play a vital
role in easy transport without harming the environment. Along with their clear mission and vision they
focused on ensuring values served to their customers, they emphasized on impact, appreciation, integrity,
adventure and also the quality.
Rivian has been quite a popular company for their high-end quality and service of electric vehicles but the
growth of Rivian was not that fast. In 2015, the company managed to acquire a huge investment and
opened a research facility. Right after that they started to work on electric vehicles aiming to create a
network of related products. The electric vehicle company first introduced their two products which were
a five-passenger pickup truck (R1T) and seven seats SUV (R1S) and the production was planned to begin
in 2020. Although in the year 2018 Rivian had only 350 employees which increased to 750 employees by
2019. But as they started the production and number went up to 9000 plus employees by the end of
November 2021.
Total Production of Rivian in the 4th Quarter,2021 was 1,003 pieces which increased to 16,304 number
of units from which the total sales was 15,564. We can say the growth has been 16 times higher than the
year 2021. Last year the total revenue of Rivian was US$ 1.66 billion but the net income of the company
was still at a loss of US$ 6.7 billion dollars. Rivian is a growing company and the market share of this
company was 0.31% by the end of 2nd Quarter, 2023.
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External Analysis

Porter’s 5 Forces
When we apply this approach to Rivian, we can analyze competition, profit prospects and the following
factors:

Threat of New Entrants

Impact: Moderate to High

Entering the EV sector necessitates significant financial expenditures in R&D, production facilities,
battery technology, supply chain, and distribution networks. The capital-intensive nature of the industry
creates a high barrier to entry. Rivian faces competition from traditional manufacturers such as General
Motors and digital businesses like Tesla. These established competitors have high brand recognition,
customer loyalty, and solid relationships with critical suppliers. The automotive sector is subject to severe
safety and environmental standards. New entrants would have to overcome extensive regulatory hurdles,
which can be time-consuming and costly.
Rivian has made great strides in the development of its electric vehicles since 2008. That gives them an
advantage over new entrants, who must work harder to cultivate relationships with important suppliers
and establish a name for themselves in the market. With backing from Amazon and Ford, Rivian has the
financial resources to invest heavily in R&D to keep innovating, distinguishing itself from the
competition, and maintaining its customers' trust. This is done to lessen the impact of new entrants and
strengthen the company's position in the market.
Bargaining Power of Suppliers
Impact: Moderate to high

Suppliers who are experts in EV-related components have higher power due to their specific experience
and skills, making it more difficult for Rivian to switch suppliers. Battery cells are a critical component
of electric vehicles, and there are a limited number of suppliers capable of producing high-quality EV
batteries. Companies like Panasonic, LG Chem, and CATL dominate this market. Rivian relies on these
suppliers, giving them significant bargaining power (Hivelr, 2023).
The Rivian R1T has a 135kWh lithium-ion battery pack split in a nine-module assembly. With the
integration of Lithium-ion-phosphate (LFP), the company hopes to drive down costs starting from 2024.
Previously, Rivian used Lithium-ion batteries relying on cobalt as a critical component to provide electric
vehicles with the range and durability consumer’s demand. Afterwards, nickel-based lithium-ion batteries
have been shown to have a higher energy density, or the ability to store more energy in a given volume,
than cobalt-based batteries. This shows the battery has more potential for improvement. With the
constantly adapting technological advancements being made, Rivian relies heavily on suppliers to provide
them with batteries that have the best performance in the trending market. This gives the suppliers a higher
level of negotiating leverage due to the scarcity of specialized suppliers in this field.
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Bargaining Power of Buyers

Impact: Moderate to high
Buyers can evaluate different EV models based on range, performance, features, and technology. If
Rivian's offerings fall below their expectations, they may seek alternatives. Government incentives, tax
credits, or refunds intended to promote EV adoption can influence price-sensitive buyers. With multiple
known automakers and new entrants offering a variety of EV models, the market is becoming more
competitive. Buyers are empowered because they can compare and select from various options.

The value of having happy and loyal customers is very significant in the electric car market. Buyers of
electric vehicles frequently think about driving range, charging convenience, vehicle performance, and
environmental effects before making a final selection. One of the most essential factors in determining an
electric car manufacturer's performance is the number of customer happiness and the brand's image.
Dissatisfied customers or those who believe that other companies provide better alternatives may be more
willing to haggle for better prices or make a move, giving them greater leverage in negotiations.

Government incentives and legislation can also impact the ability of purchasers to negotiate advantageous
terms. Various countries provide incentives, such as tax credits or subsidies, to encourage the use of
electric vehicles. Consumers' inclination to fully capitalize on these offers might have a substantial
influence on their ultimate purchasing choices. Overall, buyers in the automotive car industry may have
a medium to high level of bargaining power because of rising competition and changing customer tastes.
However, Rivian's dedication to new ideas, making its brand stand out, and forming intelligent
relationships can help lessen this power. Rivian can improve its marketplace and get better deals from
buyers by continually enhancing its goods, listening to customers' wants, and building strong brand
loyalty.

Threat of Substitutes
Impact: Moderate
Electric vehicles are replacements for traditional internal combustion engine (ICE) automobiles. Some
well-known names in the EV sector include Tesla, Volkswagen, BYD, Toyota, etc. However, there are
differences in terms of vehicle type and features. While not direct substitutes, alternative modes of
mobility such as public transportation, biking, walking, and car-sharing services exist.

The continued creation and improvement of alternative fuel technologies is another thing to think about.
Along with electric cars, other environmentally friendly transportation options like hydrogen fuel cell
vehicles or advanced biofuels are still being studied and improved. [H. B. (2023, September 1)] If these
alternative fuel technologies are indeed more efficient then they could pose a threat.

The fear of substitutes is also increased by the ease of use and availability of charging facilities. Approach
to charging sites and longer charging times versus to refueling regular cars can make it hard for people to
buy electric cars.
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Rivalry among Existing Competitors

Impact: High
The EV market has experienced a proliferation of rivals, including both established automakers and
newcomers. Competitors provide a diverse selection of EV vehicles with varying features, pricing points,
and market segments. This variety fosters competition. Many EV manufacturers are increasing their
market reach abroad, escalating global competition. Furthermore, supply chain interruptions such as
semiconductor shortages have plagued the automobile industry, including the EV sector. As organizations
compete for limited resources, such constraints can exacerbate rivalries.

There are a lot more known automakers and new companies starting to make electric vehicles. As a result,
there is more competition, and the market is filled with businesses trying to get customers' attention and
market share. There is a lot of competition between Rivian and companies like Tesla, NIO, and standard
electric manufacturers that have started making electric cars.

There is a lot of competition in this business because there are more players, technology is changing
quickly, and prices are going down. Focusing on market positioning, strategic relationships, and
differences can help Rivian get through this tough competition.

Overall, Rivian will need to be able to keep coming up with new ideas, making its goods stand out, and
adapting to changing market conditions in order to maintain its place in the competitive electric vehicle
market.

PESTEL Analysis
Political

Government support: The US government supports the electrical vehicle industry with several
initiatives, including tax incentives for buying electric cars and infrastructure investments for electric
vehicles (The White House, 2021). The White House (2021) reports that the Biden administration has
established an objective of having 50% of new car sales be electric by 2030.
Regulations: Many regulations that benefit the industry of electric vehicles have been put into place by
the US government. Automobile manufacturers are required by regulation to sell a specific percentage of
zero-emission cars a year, for instance, in line with California Air Resources Board (CARB, 2023).
Demand for electric vehicles is being fueled in part by federal fuel efficiency rules for new cars (US EPA,
2022).
Trade policy: The electric vehicle industry could be impacted by US trade policies. Taxes on imported
electric cars, for instance, may increase their cost and decrease their competitiveness (USTR, 2018).
Tax policy: The electric vehicle industry could be impacted by US tax policy. For instance, tax credits
can help consumers acquire electric vehicles at a lower cost (IRS, 2023).
European Regulations: EU regulations require automobile manufacturers to sell a specific percentage of
zero-emission vehicles yearly. The demand for electric vehicles is partly fueled by fuel efficiency
regulations established by the EU for new cars (IEA, 2023). The European Commission launched a series
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of initiatives known as the "European Green Deal," the primary goal is to make Europe carbon neutral by
the year 2050 (The European Green Deal, n.d.). The promotion of electric automobiles is one aspect of
this.

Economic

Economic growth: The electric vehicle industry continuously benefits from economic growth. Customers
can afford to buy new cars easier when the economy is expanding (CBO, 2023).
Fuel prices: Rising fuel prices can make electric vehicles more attractive to consumers (EIA, 2023).
Interest rates: Interest rates can also impact the electric vehicle industry. Higher interest rates can make
it more expensive to finance an electric vehicle purchase (Fed, 2023).
Global Economy: Financial News Media (2022) projects that the worldwide electric vehicle industry will
grow at a compound annual growth rate (CAGR) of 22.6% between 2020 and 2027. As of 2019, the IEA
projected that there will be 130 million electric cars on the road, up from 5 million in 2018. The European
Environment Agency (2023) reports that in 2019, sales of new automobiles in Europe comprised over 4%
of electric cars.

Social

Consumer awareness: Consumer awareness of electric vehicles is increasing due to several factors,
including the growing popularity of electric vehicles, the increasing availability, and government
marketing campaigns (Deloitte, 2023).
Consumer attitudes: Consumer attitudes towards electric vehicles are generally positive, but some
consumers still need help to purchase an electric vehicle due to concerns about range, charging
infrastructure, and price (J.D. Power, 2023).
Social media: is playing an increasingly significant role in the electric vehicle industry. Social media
platforms can be used to educate consumers about electric vehicles, build brand awareness, and generate
leads.

Technological

Battery technology: Battery technology is improving rapidly, leading to longer-range and more
affordable electric vehicles (BloombergNEF, 2023).
Charging technology: The infrastructure for EV charging is getting better by being accessible more
easily, quickly, and reasonably priced. An increased number of charging stations are being installed in
more places. EV charging is becoming more straightforward and capable because of new technologies,
including vehicle-to-grid, bidirectional, and wireless charging. In the future, this will promote the broad
use of electric cars (US DOE, 2023).

Vehicle technology: The technology behind EV batteries is advancing quickly, resulting in increased
range, reduced prices, and faster charging times. Two promising technologies can potentially change the
performance of electric vehicle batteries: solid-state batteries and lithium-iron-phosphate (LFP) batteries.
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Advancements in EV powertrain technology are producing more advanced and powerful motors. Along
with this, there is an expanding network of DC fast charging stations, making EV charging infrastructure
more accessible and widely available. For both consumers and companies, these advancements are
increasing the appeal and viability of EVs (US DOE, 2023).

Autonomous driving technology: Autonomous driving technology has the potential to revolutionize the
electric vehicle industry. Autonomous electric vehicles could be used to provide transportation services,
such as ride-hailing and taxi services.

Environmental

Climate change: Climate change is a major concern for many consumers, and electric vehicles can help
minimize greenhouse gas emissions and fight climate change (IPCC, 2021).
Air quality: Electric vehicles produce zero tailpipe emissions, assisting to improve air quality in urban
areas (US EPA, 2023).
Pollution: The transportation industry is a significant source of pollution in many cities, and electric
vehicles can help reduce it (US EPA, 2023). Two strategies to lower the expenses and environmental
effects of the EV sector include recycling EV batteries and utilizing recycled plastics in dunnage
containers. Recycling batteries lessens the need to mine new resources and trash, while recovered plastics
in dunnage containers are more affordable to ship and lighter and more durable.
Sustainability: In order to maintain Rivian's sustainability in the market, the firm employs solar energy
to power its production facilities and battery rechargers. Additionally, it uses zero carbon emission and
animal-free components in its cars. (Energy 5, 2023).

Legal

Product liability laws: Product liability laws can be a risk for electric vehicle manufacturers. If an electric
vehicle is involved in an accident and the accident is caused by a defect in the vehicle, the manufacturer
could be held liable (Cornell Law School, 2023).
Environmental regulations: Environmental regulations can also be a risk for electric vehicle
manufacturers. For example, the government could implement regulations that make it more difficult or
expensive to manufacture or sell electric vehicles (US EPA, 2023).
Clean Air Act: California's automobile emissions rules, which are more strict than federal requirements,
can be adopted by states under Section 177 of the Clean Air Act. Section 177 of the California Air Quality
Act has mandated that all nine states prohibit the sale of new gas-powered automobiles by 2035. Rivian
is an electric car company. Rivian stands to gain from the 2035 prohibition on the sale of new gas-powered
automobiles, as this would likely drive up demand for electric vehicles (Avery, 2019).

Paris Agreement: “The Paris Agreement is an international agreement within the United Nations
Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gas emissions
mitigation, adaptation, and finance starting in 2020” (The Paris Agreement, n.d.). The agreement's long-
term objective is to keep the global temperature below 2 degree Celsius and to pursue efforts to limit the
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increase to 1.5 degrees Celsius (ArcGIS StoryMaps, 2021). Most of the countries have to follow this
agreement, which is beneficial for Rivian.

SWOT Analysis
Strength Weakness
● Strong Financial Backup ● Supercharger Format Issue
● Sustainable Electric Vehicle ● High Repair Cost
● Off Road Capable ● Acquiring Innovative and early
majority Customers is difficult
because of failure to deliver in time.
Opportunities Threat
● Possibility of high demand all over the world. ● Automobile giants are shifting to
● Technological Advancement Electric Vehicle might cause
disruption.

Strength

Strong Financial Backup: Amazon has invested in Rivian about $1 billion. This is Amazon’s first major
investment in an automobile company in recent years. Also, Rivian has a pickup delivery truck for
Amazon. It also raised a funding of $700 million from Amazon CEO Jeff Bezos. Though the company is
running at a loss, still they have a good financial backup from Amazon (Haynes, 2023).

Sustainable Electric Vehicle: Rivian contributes to the environment by making EVs which are eco-
friendly also there is no carbon emission. It also reduces the carbon footprint. It's not only beneficial for
individual customers but also it supports the government's initiative to make a better environment. To
reduce the environmental effects Rivian uses sustainable products. From manufacturing to recycling, they
ensure that it reduces the ecological footprint ("Eco-Friendly Rivian Electric Cars and the Environmental
Impact," n.d.).

Off Road capability: Rivian's electric vehicles are developed with off-road capabilities, making them
ideal for outdoor enthusiasts looking to explore without negatively impacting the environment. These EVs
can traverse rough terrain with ease, with characteristics such as a wading depth of up to three feet and a
ground clearance of up to 14 inches (The Pros and cons of owning a rivian electric car).

Weakness

Supercharger Format Issue: The non-Tesla EVs will be built with Tesla’s North American Charging
Standard so their customers get the access to Tesla’s supercharger network. It's one of the main
weaknesses of Rivian as they lack the ability to give their customer a flexible charging solution. Their
customer might think of switching to Tesla for this reason (John).
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High Repair Cost: According to research one of the weaknesses of Rivian is their high repair cost. It may
cost almost more than half of the vehicle's purchase price. The reason for the higher cost is, there are less
repair shops, so the shops charge more. In addition, the price of servicing the EVs depends on more high-
tech parts. Rivian does not have any dealers and they have only 34 service centers of their own
(Kay).Acquiring early majority customers is difficult because of failure to deliver in time. As they do not
have the capacity to produce more EVs to meet the customer demand in that certain period it's difficult
for them to early majority customers.

Opportunities

Possibility of high demand all over the world: There is a growing demand for EVs nowadays. As people
are shifting to EVs from the traditional fuel vehicles, Rivian has a great opportunity to grab the market in
future. Rivian is headquartered mostly in the United States. Other countries, such as Europe and China,
do have a potential market. Rivian should work to open additional branches throughout the world in order
to have access to a larger market. It will assist to increase the company's revenues and sales while also
spreading electric car technology internationally. (Ourabah, 2023)

Threat

As there is a huge demand and popularity for the EVs Automobile giants are shifting to Electric Vehicle
might cause disruption. It may be difficult for Rivian to compete with the new entrants.

Competitor Analysis
Local Competitors:
Tesla: Tesla is a renowned electric vehicle company based in the USA. Elon Musk is the founder of
Tesla, founded it in 2003. It became one of the largest companies in the world within 20 years with a
market cap of more than 1 trillion.
Tesla's cars are incredibly popular and have broken several sales records. The first electric vehicle to reach
a million sales worldwide was the Tesla Model 3. The Model Y became the best-selling vehicle globally
in the first quarter of 2023, becoming the first electric vehicle to occupy that position. Their upcoming
models CyberTruck and Roadster will be the biggest competitors of Rivian Automotive’s SUVs. Besides
these Tesla has a massive network of superchargers that makes Tesla a formidable competitor of Rivian.
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Ford Motor Company: Ford Motor Company is a 120-year-old company founded on the date of 16
June 1903 in Detroit, Michigan. They are an American multinational
automobile manufacturing company. Henry Ford founded and incorporated
this company. They used to make traditional automobiles like SUVs and
cars. But nowadays they are also focusing on electric vehicles. Before
focusing on EVs they were also one of the shareholders of Rivian
Automotive, but in the year 2021, they separated themselves from Rivian.

Ford took advantage of its established product line and brand familiarity to join the electric vehicle (EV)
industry with the Mustang Mach-E and the all-electric F-150 Lightning. Ford is making investments in
EV technologies, such as those related to autonomous driving and battery research. Ford’s SUVs will
directly compete with Rivian’s R1S.

General Motors: General Motors is another oldest multinational automobile

company based in the USA. It was founded in the year of 1908, 115 years ago. They
also used to make traditional vehicles but recently they also entered the electric
vehicle market. Rivian faces tough rivalry from General Motors in the electric
vehicle sector. With a rich history and plenty of resources, General Motors is one
of the biggest and most well-known automakers globally.
The Chevrolet Bolt EV and the impending GMC Hummer EV are just two
examples of EV products that General Motors has been aggressively
adding to its range. In terms of pricing and market niche, Rivian's electric
vehicles are directly rivaled by the Chevrolet Bolt EV in particular.
General Motors has a global production network and developed
manufacturing skills. This enables them to increase the manufacturing of
EVs more quickly and effectively.
Bollinger Motors: Bollinger Motors was founded in 2014, only 9 years ago in New York. Robert
Bollinger is the founder of the company. Bollinger Motors is a new company that manufactures electric
adventure vehicles as well. Rivian's R1T and R1S are designed similarly to the company's B1 SUV and
B2 pickup truck, but Bollinger's cars have a more tough and practical appearance. Both Bollinger and
Rivian are making electric trucks and EVs with off-road capability in order to carve out a market niche.
Similar to Rivian, Bollinger Motors caters to outdoor enthusiasts and ecologically concerned customers
who value the features and adaptability of electric off-road vehicles.

International Competitors:
Rivian Automotive faces competition from established players like Lordstown Motors and Atlas Motor,
as well as emerging startups such as Hercules, Tembo, Telo Trucks, and Kaiyun Motors in the electric
vehicle industry. Global rivals, particularly Chinese manufacturers like BYD and Xpeng, are gaining
traction, with China dominating the EV market. In Europe, Chinese EV sales reached nearly 350,000 units
in the first half of the year, surpassing the total for the entire year of 2022 (He, 2023). Chinese EVs are
approximately 40% cheaper in China than in Europe and 50% cheaper than in the US, contributing to their
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success. Chinese manufacturers control 60% of the global EV battery market, giving them a competitive
edge. In the foreseeable future, Rivian may face strong rivalry in this sector from both domestic and global
competitors.

Corporate Level Strategy

Joint Venture
Amazon: Amazon invested and made a partnership with Rivian. Amazon is trying to follow the climate
pledge in the Paris Agreement to make a sustainable future. In order to fulfill that, they needed electric
delivery vans as vehicles. So, Rivian is committed to Amazon for delivering 100,000 custom made
delivery vans by 2030 which are EDV 500 and 700 called Amazon Fleet (Amazon, 2023). Amazon helps
Rivian with their Amazon Web Services such as Software Defined Vehicle (SDV) Architecture, Over the
Air Updates, AWS Analytics (Rivian Selects AWS as Its Preferred Cloud Provider to Drive Efficiency,
Performance, and Refinement of Electric Vehicles, 2021). Amazon Web Services various types of
assistance for Rivian are described below:

● SDV Architecture acts in such a way that the vehicle is integrated with the infotainment system to
allow diagnostics, maintenance from the cloud service.
● Rivian uses AWS analytics to enhance visualization of Rivian’s vertically integrated business
model, under which the company manages all of its operations internally.

Rivian uses Amazon Simple Storage Service (Amazon S3) and AWS Glue (a serverless data integration
service for data analytics, machine learning, and application development) to easily transmit data and gain
insights (Rivian Selects AWS as Its Preferred Cloud Provider to Drive Efficiency, Performance, and
Refinement of Electric Vehicles, 2021). This can lead to structural cost and operational efficiency over
less integrated traditional automakers.

Cox Automotive: Cox Automotive invested 350 million dollars in Rivian in order to gain the
understanding of the battery system of Rivian (Denham, 2019). Cox Automotive wants to know how much
the battery’s capacity, the charging and discharging system, potentiality of solar energy implementation
etc. There are 30 automotive brands under Cox Automotive around the globe. They have specialties in
“logistics, fleet management and service and digital retailing which are the back-end retail support that a
company selling and servicing vehicles will need” (Korosec, 2019). So, Rivian will look for long term
opportunities and assistance from Cox Automotive for such services.

Quasi Integration
Ford Motor Company: Ford Motor Company created a partnership with Rivian in 2019 by investing
500 million dollars in Rivian. This partnership had been built because Ford Motor wanted to use Rivian’s
Skateboard Platform technology for their future electric vehicles and Rivian wanted to use Ford’s
manufacturing expertise to cut weight from their vehicles (Thebodeau, 2019). Ford was planning to launch
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new electric vehicles in the market, which might be the newly launched Ford F-150 Lightning. According
to the proxy statement of 2023 (Rivian, 2023), Rivian is engaged in producing Bodies in White (A car
body sheet while all components are welded into it) for Troy Design and Manufacturing Co. (TDM),
which is a wholly owned subsidiary of Ford Motor. TDM would supply certain vehicle components with
a certain price for Rivian’s R1 model vehicles.

Vertical Integration

Rivian is manufacturing the parts of the vehicles instead of relying on their suppliers to reduce their
vehicle’s cost structure (Denham, 2021). The integrations are described below:

Stamping: Stamping means forming, cutting and shaping into a desired part from a large equipment. Most
of the vehicles rely on suppliers for vehicle parts and use stamping only on the surface level of the vehicle
(Denham, 2021). It is done by a stamping press which is linked with a programmable logic controller.
Rivian retooled some stamping press bought from Mitsubishi Plant and stamped 300 body parts for all the
products.

Battery Cell Manufacturing: Rivian used to purchase battery cells from Samsung. 7000 cells are
required to make one battery pack (Denham, 2021). Rivian now produces battery cells in house to meet
their production goal of 30 battery packs per hour.

Motor Manufacturing: Rivian’s motors was bought from Bosch. However, they are now producing
motors in house (Denham, 2021). These motors are called Enduro Motors in Rivian.

Plans for Expansion

European Expansion: RJ Scaringe, the founder of Rivian, recently announced in an interview with
Bloomberg TV that the company has successfully set up operations in Europe. This expansion
encompasses the establishment of a service and parts acquisition network, positioning Rivian for a broader
growth strategy in the coming months (McDee, 2023). According to McDee (2023), Scaringe did not
explicitly mention the inclusion of the well-known R1T and R1S models in the European expansion.
Instead, attention is focused on the upcoming R2 SUV, which is expected to be smaller, more cost-
effective, and potentially better suited for the European market. Scaringe emphasizes that these EDVs go
beyond mere production and delivery—they signify Rivian's initial infrastructure establishment in Europe
with parts distribution and servicing capabilities.

Capacity Expansion through the Georgia Factory: Rivian Automotive is set to initiate construction on
a new factory in Georgia early next year, underscoring the company's commitment to expanding
production capabilities. This announcement coincides with the opening of a retail location in Atlanta, part
of Rivian's nationwide network of "spaces." Although the company adheres to Georgia's online-only sales
regulations, these physical spaces serve as hubs for engaging potential customers. The $5 billion
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manufacturing complex, east of Atlanta, aims to produce more affordable R2 vehicles for a wider market.
Anticipating completion of grading by year's end, Rivian envisions the site near Social Circle as a pivotal
element in its growth strategy, with plans to employ 7,500 individuals at the facility (The Associated Press,
2023).

Moreover, looking ahead, Rivian envisions a global presence with four assembly plants, potentially
expanding in the US and entering the Chinese market. However, navigating China's competitive
landscape, especially during a price war, poses challenges for Rivian. In June 2023, the company
announced its intention to adopt Tesla's charging standard, providing customers access to around 12,000
Tesla Superchargers in the US and Canada by spring 2024. Additionally, Rivian plans to integrate a
Tesla-like charging port standard into its vehicles by 2025 (Ourabah, 2023).

Business Level Strategy

Value Innovation

Sustainability: Rivian’s target is producing sustainable car so that it does not hard environment. These
cars do not run on any kind of diesel or petrol so it does not release any pollutants to the environment, the
cars mostly run-on electricity. They provide electric charging stations which the electricity comes from
renewable energy like solar or wind (King, 2023). So, Rivian is contributing to the environment by
practicing using eco-friendly devices and decreasing the carbon footprints in the world. ("Eco-Friendly
Rivian Electric Cars and the Environmental Impact," n.d.). Rivian recycles its battery packs and uses
animal free materials to interior their vehicles, so it can be easily recycled or repaired for the design
(Kumar, 2021). Moreover, their dunnage container is made out of ocean bound plastic to reduce plastic
pollution (our-company, n.d.). Sustainable business practices of Rivian is a valuable innovation because
the fuel crisis for vehicles, the pollution to the ocean and landfill do not affect them. Thus, it increases the
production possibility in the near future.

Battery Evolve: Rivian is using Lithium Iron Phosphate (LFP) batteries which is now the standard
utilization of electric vehicles for long range (Kolodony, 2022). Lithium-ion batteries are scaled up for
vehicle utilization, which were previously used for laptops. Moreover, Rivian is using a different cell
design of battery called 2170 which can deliver twice the current than previous battery model 18650
(Hyatt, 2018). Rivian designed this battery to be more efficient way which are described below:

● They use a metal chill plate between the rows of battery cells so that it can cool multiple rows of
cells to cut down power use (Hyatt, 2018).
● The battery pack is covered by carbon composite to reduce weight and make it waterproof (Hyatt,
2018).
 15

Rivian has increased battery capacity because of their idea. Focusing in Lithium rather than nickel, cobalt
has become cheaper to produce for car and more efficient. Moreover, the efficiency of the battery is
increased by Rivian’s design practice in battery. However, this battery has not been used till 2022.

Red Ocean Strategy

Rivian adopts a red ocean strategy by entering the competitive landscape of the existing electronic vehicle
market. Despite concentrating on manufacturing compact trucks and SUVs, they face competition from
other companies operating in the same market segment. Rivian distinguishes itself through a distinctive
vision and mission statement centered on sustainable mobility that does not compromise the environment,
allowing them to leverage existing demand and surpass rivals.

Competitive Advantage through Business Strategy

Focused Differentiation Strategy: Rivian targeted a niche group of customers who have an adventurous
spirit, live in fuel run vehicle banned states, and are environmentally aware. For such customers Rivian
offers electric pickup and SUV to the market consisting of long drive and off-road capabilities with
innovative technology and sustainable material while ensuring its luxury. Examples of focused
differentiation strategy has been given below:

Adventurous Spirit: Rivian wants to ensure that their customers’ adventurous spirit lives on while they
are using Rivian’s electric vehicles. These vehicles are built in such a way that their customers can travel
across one state to another easily without worrying about the car’s battery or power. The cars Rivian
manufactures can travel up to 400 miles. Rivian has produced one of the fastest electric vehicles which
can speed up to 0-60 miles per hour within 3 seconds (eco-friendly-rivian-electric-cars-and-the-
environmental-impact).
Customization According to Customer Needs: Rivian provides two variants, the R1T and the R1S, both
of which have some degree of customization. Options for personalization include selecting wheels, colors,
and packages. For instance, the R1S has an Adventure option with quad-motor AWD 1, all-terrain towing,
and all-purpose snow capabilities starting at $78,000. A Sport package is also available for the R1S, which
offers functions including soft sand, rock crawl, drift, rally, and battery conservation. (Vehicle Studio.
Rivian. (n.d.).). Moreover, there is an option for R1T whether the customer wants its bed covered or not.
 16

Demand Acceleration:
Trialability: Rivian has offered their potential customers for a demo drive. So, the customers can test
drive and check whether the car is to their liking or not. This
is a major part to accelerate their product demand.
Compatibility: Compatible for California and other 9 zones
where Fuel run vehicles are banned right now. And Rivian is
operating in California, Michigan, Arizona. The demand for
Rivian will increase day by day in those areas.
Observability: The vertical headlight looks different among
all other cars manufactured in the automobile industry. If
anyone in public sees these vehicles, they will instantly
realize or be curious about Rivian’s presence. The more this
vehicles presence increase, the more customers will be
attracted toward Rivian.

Functional Level Strategy

Zero Carbon Emissions Functional Strategy

Impact Reporting: Impact Reporting reflects how much Rivian is producing footprints on earth such as
carbon, environmental etc. The goal is to show social and environmental impact from qualitative research.
This is a commitment to sustainability and social change toward stakeholders. After 2023 full year, Rivian
will publish this impact reporting to show the stakeholders how sustainable their business is (our-
company, n.d.).

Waste Management’s Functional Strategy

1) Complete Life Cycle by Recycling
a) Battery Recycle: One of these actions that Rivian planned was recycling the lithium-ion
batteries that are used in its electric automobiles. Battery Resources, a company based in
Worcester, Massachusetts, has invested $43 million to rebuild a current facility in
Covington. Every year, it will be able to process 30,000 tons of leftover lithium-ion battery
trash and components. Rivian Automotive has been looking on ways to store energy by
reusing its batteries, though. To lessen dependency on the grid, Rivian, for example,
intends to repurpose the 135 kilowatt-hour battery packs from its development cars into
compact modules that can gather energy from solar panels or other forms of energy.
b) Dunnage Container manufacture with Plastic: The reusable dunnage containers at
Rivian's plant are composed of plastics that end up in the ocean (our-company, n.d.). Prior
 17

to the Paris Agreement, by signing the Climate Pledge, Rivian pledged to achieve net-zero
carbon emissions by 2040.

Competitive Advantage through Functional Activities

Achieving Superior Efficiency

Achieving Economies of Scale: According to Rivian’s shareholder’s letter of quarter 2 they are focusing
on production increase in order to improve their profitability and cost decrease through economies of
scale. Moreover, they are now producing in-house Enduro motors which has reduced the dependency for
suppliers and decreased the cost structures for every vehicle. “Skateboard Platform” which is the carrier
of the Rivian’s body kit is the same for R1S and R1T. This skateboard platform works as a chassis for
vehicles and chassis are usually different for different models. Creating a uniform chassis or skateboard
platform has drastically reduced its cost structure as well.

Flexible Manufacturing System: Rivian has 2 plants in one production facility, 2 general assembly lines
and 2 body shops. 1 Assembly line produces R1S and R1T another is for amazon fleet vans EDV 700 and
EDV500 (Rivian, 2022). Manufacturing 4 types of vehicles in two assembly lines in one factory brings
economies of scale to Rivian.

Achieving Superior Quality:

Quality as Reliability: Rivian ensures quality as reliability by implementing Auto Wheel Drive (AWD),
Skateboard platform so that it can move through all types of off-road while ensuring perfect handling.
Moreover, R1S and R1T can traverse more than 300-400 miles with full charge. Moreover, the R1T can
tow nearly 11 thousand pounds of car.

Quality as Excellence: Rivian integrated all of its drive mode electronically with a tab. Moreover, the
R1S and R1T have been made with 7 premium seats without using animal leather. The headlights of
Rivian are unique in design because no car has brought stadium headlights as a design.

Achieving Superior Innovation

Off Road Capability Incorporating with Technology: Rivian’s R1S and R1T both are designed in a
way so the user can traverse through terrain, mud, sand or 3 feet water depth however the road’s condition
is. The vehicles have infotainment service which can control its advanced driving modes (all purpose,
Sport, Terrain, Off Road, Towing, brake regeneration, stability), ventilation flow from front and rear,
Access & Security, Energy remaining etc. (Rivian R1T User Interface | Complete In-Depth Guide, 2022).

Energy Efficiency:

Providing 100% Clean Energy: Rivian not only manufactures their car with wind and solar energy but
also they try their best to provide the electricity for recharging with sustainable energy. The vehicle’s
demand is rising, so will the electricity demand. In order to meet the demand for recharging, they bought
Starfire mine to create a solar energy project with 800-Megawatt capacity (Rivian, Bright Night, Rivian,
 18

and The Nature Conservancy Unite to Transform Starfire Coal Mine into Kentucky’s Largest Renewable
Power Project, 2023). From this project, they can ensure clean energy recharge more than 450 million
miles to their vehicles.

Regenerative Braking System: Rivian has a technology on its braking system, which can bring back the
mechanical energy into chemical energy into the battery by braking. This is done by switching the motor
into a generator for a brief time (James, 2022). This regenerative braking system is 20-30% efficient due
to system loss but it does have energy efficiency built in. It can be complicated due to brake bias if the car
is not All Wheel Drive or Four-Wheel Drive (James, 2022). Even with 300 miles, ranged vehicle can
become 300*1.30=390 miles ranged due to brake regeneration.

Good Ethical Activities of Rivian

Environmental Responsibility
Sustainable Mission for a Lasting Future: Rivian's main goal is to ensure that adventure and exploration
can continue forever. They believe that achieving this long-lasting vision is crucial. They're focused on
reducing pollution and shifting our global economy away from fossil fuels to ensure the Earth remains a
vibrant and sustainable place for future generations. The products they create are actively working to
revolutionize how we travel and use energy, pushing society closer to this objective.

Empowering the Workforce through Shared Ownership: To attract and retain the best workforce, they
offer every new full-time employee a stake in the company. This idea of shared ownership is a central
message in their recruitment efforts. They believe that when everyone feels a true sense of ownership, it
leads to collective success and results in decisions that benefit Rivian in the long run, not just in the
present.

Community Involvement and Environmental Education: Additionally, they give their employees
opportunities to participate in community projects that enhance the natural environment and support their
"Forever" mission. They're also developing a program called Sustainability Empowerment, which aims to
raise awareness, educate, and inspire environmentally conscious decision-making at work and in personal
life.

Rivian’s Innovative Plastic Recycling Initiative: Rivian is dedicated to spearheading a plastic recycling
campaign with the goal of gathering 500,000 kilograms (1.1 million pounds) of single-use plastic annually
by 2024, preventing it from polluting the oceans. Instead, Rivian plans to repurpose this plastic into
containers utilized for transporting components to its production line. To acquire this material, Rivian has
collaborated with global partners to implement a system designed to collect what it refers to as "ocean-
bound plastic" – items like water bottles, food containers, and milk jugs that are irresponsibly discarded
and eventually find their way into water bodies, ultimately reaching the sea (Williams, n.d.). The dunnage
containers employed at their facility are both reusable and crafted from plastic sourced from the ocean.
 19

Rivian's Major Renewable Energy Contract for Net-Zero Emissions Goal: Rivian has secured a
substantial renewable energy contract, a major stride towards their 2040 net-zero emissions goal. They
will be the primary corporate client for an upcoming 210-megawatt solar project and will provide 180
megawatts to local grid for the Starfire Renewable Energy Center (Why Rivian Is Funding a $1 Billion
Solar Project Built on a Kentucky Coal Mine | GreenBiz, n.d.). This strategic agreement underscores
Rivian's commitment to a sustainable future. They are investing in solar and wind projects to integrate
low-carbon electricity into grids currently reliant on fossil fuels.

Pioneering Eco-Friendly Practices in Transportation: Rivian is doing all kinds of things to stop
pollution and protect our environment. They want to make sure they don't harm the planet. They've
promised to do this by 2040, which is earlier than what most countries agreed on in the Paris Agreement.
They've also spent a lot of money on using clean energy and making things in an eco-friendly way. Rivian
designs its products for complete life cycles, such as using 100% animal-free materials for their interiors,
and making their battery packs easily removable for recycling or second-life applications.
"Forever" Charity: Preserving Nature for Generations: Rivian is not just thinking about their cars
and trucks; they're also starting a charity called "Forever." This charity's job is to help with the climate
crisis and keep important animals and plants safe. When they became a public company, they gave 1% of
their ownership in Forever. This lot of money will help ‘Forever’ do important work like taking care of
wild places, forests, rivers, and oceans.

These wild places work like big sponges. They soak up carbon dioxide from the air and keep it in the
ground, trees, and water. By giving 1% of Rivian's ownership to Forever, they're saying that nature is
important to them. As Rivian becomes more successful, the charity will also have more money to do good
things. This makes a cycle where Rivian's success helps nature, and nature's health is tied to Rivian's
success.

Supplier Relationship
Ethical Sourcing: Rivian expressed a commitment to working with suppliers who shared their values and
commitment to ethical business practices. This implies an emphasis on selecting partners who adhere to
fair labor practices, environmental regulations, and other ethical standards.

Fair Labor Practices: Rivian works with suppliers who maintain fair labor practices along with standard
working hours, equitable wages and a secured workplace. They anticipate their suppliers to ensure the
well-being and safety of their employees and uphold good working conditions. They probably also want
them to obey the laws about labor.
Quality Standards: Maintaining high-quality standards is essential in supplier relationships. Ethical
companies like Rivian require suppliers to meet specific quality standards to ensure the reliability and
safety of their products.

Responsible Sourcing; Rivian requires its suppliers to adhere to responsible sourcing practices. This can
include ensuring that raw materials are obtained in an environmentally sustainable and socially responsible
manner.
 20

Transparency and Communication: Rivian wants its suppliers not to get into fights or negative
judgements when working with them. Moreover, Rivian does not expect any breach of data such as their
connections with employees specially who have a power on the business practices.

Rivian also encourages the suppliers to embrace the "whistleblowing" route by which workers can have
the courage to raise their voice against criminality. This should guarantee that individuals who raise
concerns honestly and sincerely face no negative consequences.

Employee Well-Being
Rivian prioritizes creating a workplace where employees collaborate and support each other. They go the
extra mile to ensure that every member of their team feels valued, motivated, and empowered to contribute
fresh ideas. An annual tradition, the "Family and Friends Day," serves as a testament to their
commitment to inclusivity and unity within the organization.

In 2023, Rivian's Family and Friends Day was a lively event featuring activities like rock climbing, a
delightful hayrack ride, and a charming petting zoo, all graciously provided by local businesses. This
gathering exemplifies Rivian's dedication to not only creating enjoyable experiences but also to supporting
local enterprises. With a workforce of approximately 7,800 individuals in the local community, Rivian
makes great effort in planning activities that generate a familial feel, recognizing that many people work
different shifts and rarely have the opportunity to gather in this way.

Tim Fallon, the Vice President of Manufacturing Operations, emphasized the significance of these
gatherings, stating that it truly solidifies the sense of a Rivian family. Such events are extremely important
for fostering a lively culture and creating the family-like togetherness Rivian aims to foster. He further
noted that this communal approach also serves as an educational platform, reaching out to various
educational institutions, from high schools and elementary schools to community colleges and
universities. This engagement helps in talent development and strengthens the foundation for collective
success as a team. Rivian's initiatives clearly reflect their commitment to ethical practices, community
involvement, and employee well-being.

Bad ethics of Rivian

Breach of Corporate Social Responsibilities

Rivian is charged with failing to address its concerns over the environment and human rights. Regarding
issues with human rights and the environment in the battery supply chain of the electric vehicle company,
a pension fund advisor with union ties pressed Rivian. Dieter Waizenegger, executive director of SOC
Investment Group, claims that Irvine lacks substance (Klayman, 2021). Additionally, he claimed that
Rivian had failed to provide transparent assurances regarding the resolution of significant environmental
and human rights issues. The automotive industry, including Rivian, is facing mounting pressure to
substantiate the ethical sourcing of minerals like lithium and cobalt for their electric vehicle batteries.
Rivian further claims to abide by strict CSR, whereas the reports mentioned above are contradicting.
 21

Construction Site Brought Fouling Water To The Neighborhood

Richards (2022) stated that the rural Atlanta community near the Rivian construction site has been
adversely affected by water pollution. A resident revealed that within weeks of Rivian initiating
construction activities, the water passing through his filter exhibited a discernible brown tint. Allegedly,
the construction activities at Rivian are causing contamination by displacing the soil surrounding the well
line. In response to this situation, residents have formally requested that Rivian halt its construction
operations involving heavy machinery, as they believe it is the primary source of water pollution in their
neighborhood.

Discriminations
Gender discrimination: Laura Schwab, Rivian's ex-vice president overseeing trading and retailing,
ordered for a legal action against the company alleging discriminatory practices. According to Schwab,
Rivian harbors a workplace environment characterized by a pervasive male-dominated culture that
negatively affects women. She contends that her termination resulted from her efforts to address these
gender-based issues with the Human Resources department. Schwab further asserts that she was
systematically excluded from significant meetings and decision-making processes and that her
contributions were either dismissed or attributed to male counterparts. These allegations spotlight a
concerning aspect of Rivian's corporate culture, as perceived by Schwab (O’Kane, 2021).

Racial discrimination: A resident of McLean County has filed a federal complaint against Rivian
Automotive, claiming that while in Rivian’s workplace, he was subjected to racial harassment and
discrimination. He listed many statements and occurrences between February and July 2022 in the lawsuit.
These included claims that a coworker used a ‘racist slur’ and that another put a statue of a black person
in blackface on his desk, referring him to be ashamed of being black. Blackface is the word used to
describe the practice of donning makeup to replicate the appearance of a Black person. In this case,
Richardson said that he contacted his management and human resources about the event; however, the
manager of human resources did not take the matter seriously and had only advised him to disregard the
negative remarks (Janik, 2023).

Unfair commercial Practices

Uninformed price hike: Sudden price changes have also stirred up debate. Even though customers had
already confirmed their pre-orders, Rivian decided to raise the prices of their R1T pickup and R1S SUVs
just a few days before the initial scheduled deliveries. This infuriated people who had already placed pre-
orders as a usual opposite reaction. Some early adopters considered the unexpected price hike to betray
their trust, which prompted Rivian to retract its decision and keep the pre-order prices intact (Kooverjee,
2023).
A shareholder filed a complaint against Rivian, alleging that the business misled investors about the costs
of its electric vehicles. The shareholder claimed that Rivian did not disclose that the R1S SUV and R1T
pickup truck were initially priced lower than sustainable, leading to subsequent price adjustments shortly
after Rivian’s initial public offering (IPO) in November 2021. This sudden increase in prices resulted in
 22

discontent among customers and negatively impacted Rivian's reputation for honesty and openness. The
lawsuit alleges Rivian violated federal securities laws by presenting inaccurate information in its IPO
documentation.

Rivian reversed its decision after a span of two days, assuring that customers who had previously placed
orders at the original prices would not be subjected to the increased prices. Additionally, those customers
who had previously canceled their orders were allowed to reinstate them. In a letter dated March 3, 2022,
Rivian’s CEO, RJ Scaringe, personally addressed the customers and acknowledged the company's error,
expressing remorse for breaching their trust in Rivian. The company attributed the price increases to the
pressures of inflation (“Rivian Sued for Allegedly Misleading Investors About Prices,” 2022).

Misleading financial information in Shareholder’s Letter: In

their 2022 shareholder letters, Rivian presented information that
may not accurately reflect the true situation. They emphasized
strong pre-order numbers initially, indicating over 90,000 pre-
orders from the USA and Canada as of May 9, 2022, in the first
quarter. This number increased to 98,000 by June 30 in the second
quarter. Subsequently, in the third quarter, they reported a total of
114,000 pre-orders or more by November 7, 2022.
However, in the fourth and final quarter, they omitted specific pre-
order figures and instead highlighted a production target of around
50,000 for 2023. This sharp drop in the production target compared
to the third quarter's pre-order numbers suggests a significant
decline in demand, possibly accompanied by canceled pre-orders
(Asymmetric Investing by Travis Hoium, 2023). This disparity in
information presentation in the last quarter's shareholder letter
raises ethical concerns.
Rivian's recent earnings report disappointed investors due to
slower-than-expected production increases and unclear information
about the demand for its products, causing uncertainty among
shareholders.
The company is presenting an image of high demand but is not producing enough to meet this supposed
demand. Many customers with pre-ordered vehicles have not received confirmation or a guarantee of
when they will receive them. This lack of transparency concerns both shareholders and customers, as it
raises questions about the accuracy of the information being shared by Rivian.
Allegation of stealing employees and trade secrets: As Rivian is engaged in a high-stakes industry,
Rivian Automotive has experienced its fair share of controversy. Allegations of intellectual property theft
are among the issues that receive the most media attention. In 2020, Tesla sued Rivian, alleging that Rivian
had poached Tesla employees and urged them to carry secret and private information with them. Rivian,
in their code of business conduct and ethics, stated, 'We abide by trade compliance laws' under the Respect
 23

category and 'We follow privacy laws' under the protected category. However, according to Tesla's claim,
Rivian violates its declared statements (Kooverjee, 2023).

Violation of employee rights

Employee safety hazards: According to complaints made to federal inspectors, twelve employees at
minimum of Rivian Automotive Inc. blamed the automotive manufacturer of going against legal security
regulations at its Illinois plant.

In line with the blames being made, Rivian neglected identified risks and considered safety, forcing some
employees to wear faulty respirators during the manufacturing process. They also described a number of
wounds, such as shattered ribs, a slit ear, a fractured foot, and a crushed hand. According to a Rivian
employee, management pulled faulty electrical cables out of the trash, connected it tio the respirators and
instructed workers to use them (Eidelson & Ludlow, 2022).

Thus, it may be concluded that Rivian has an "imposing" work culture, and little consideration is given to
how employees feel about their positions. Performance is strongly emphasized at the expense of
satisfaction.

Employee layoff without performance assessment: According to the news from Times of India and
SFGATE, electric car developer Rivian, financed by digital giant Amazon, is laying off 6% of its workers
for the second time in the past year to reduce expenses (Ians, 2023).

According to Reuters, RJ Scaringe, the chief executive of Rivian, informed his staff via email that they
would learn of their fate from their managers within a half-hour if they were going to be let go. According
to Scaringe, employees at Rivian's manufacturing facility in Illinois are safe; therefore, layoffs will more
likely affect corporate personnel at company offices in Irvine, Palo Alto, and other locations. The CEO
also expressed regret to the staff for the necessity of the layoffs. Even in July of last year, the manufacturer
of electric vehicles announced it would let go of 800 workers, or 6% of its 14000 workforce, to focus on
developing newer models of its cars. Amy Mast, a business spokesman, stated in an email that the
company decided to expedite the development of future models of its electric trucks and SUVs (Council,
2023).

Recommendations

For breach of corporate social responsibility:

● Rivian should acknowledge the allegations and express its commitment to uphold the highest
standards of CSR in its operations and supply chain.
● Rivian should conduct a thorough and transparent investigation of its battery suppliers and their
sourcing practices with the help of independent third-party auditors and experts. Rivian should
identify any gaps or risks in its due diligence process and ensure that its suppliers comply with the
relevant laws, regulations, and ethical principles regarding human rights and environmental
protection.
 24

● Rivian should implement robust systems to trace the origin of minerals used in their batteries,
ensuring they are sourced from responsible and ethical suppliers. This information should be made
available to stakeholders through regular reports.
● Rivian should communicate its CSR strategy and actions to its customers, investors, employees,
partners, and the public transparently and consistently. This program should provide a platform
for open dialogue and collaborative efforts to address concerns.

For discriminations:

● Create and communicate clear policies that prohibit all forms of discrimination, including gender
and racial discrimination, in the workplace. These policies should be freely available to all
workers.
● Conduct regular training sessions for employees and managers on diversity, inclusion, gender
equality, and racial sensitivity. This can help create a more inclusive and respectful work
environment.
● Ensure that promotions and opportunities for advancement are fair and based on merit, not
influenced by gender or race. Monitor and address any disparities in leadership positions.
● Take all complaints of discrimination seriously. Make it clear that discriminatory behavior,
whether based on gender, race, or any other factor, will not be tolerated in the workplace. Establish
a confidential reporting system and conduct thorough investigations when incidents are reported.

For unfair commercial practices:

● Rivian should revise its shareholder letters and make them more consistent, clear, and
comprehensive. Rivian should include relevant data and metrics to support its claims and
projections, such as customer satisfaction, retention, loyalty, referrals, reviews, ratings, and
testimonials. Rivian should also provide more details about its product features, specifications,
pricing, availability, delivery, warranty, and service.
● Rivian should explain the reasons behind the discrepancy in the pre-order and production numbers,
such as supply chain disruptions, technical difficulties, regulatory hurdles, or customer feedback.
Rivian should also disclose the current status of its pre-orders, including cancellations and refunds,
and provide a realistic estimate of its future demand and production capacity.
● Rivian should establish a clear and transparent price protection policy for customers who have
placed pre-orders. This policy should guarantee that the price quoted during pre-order will be
honored, regardless of any subsequent price adjustments. This measure can help build and maintain
trust with early adopters and demonstrate a commitment to fair and consistent pricing practices.
● They should implement comprehensive onboarding processes for new employees that emphasize
respecting intellectual property and trade secrets. They may conduct regular audits and
assessments to ensure strict trade and privacy laws compliance.
 25

For violation of employee rights:

● Ensuring a safe work environment should be the top priority. Addressing safety hazards and
providing proper training and protective equipment is critical to protect employees from harm.
● Conducting layoffs fairly and transparently is vital to upholding employee rights during
challenging times. Fair procedures, including performance assessments, help employees
understand and accept the necessity of such actions.
● Clear and prompt communication with employees is crucial for updating them on company
decisions, such as layoffs. Offering channels for employees to seek clarification and pose questions
contributes to the establishment of trust and lessens any sense of ambiguity.

For Rivian as a whole:

● Reduce High repair cost: As Rivian has less repair shops, the demands increase and the repair
cost is very high. If Rivian can increase the number of servicing centers, This increasing
competition among the servicing centers will reduce the repair costs. Also Rivian can do
partnership with the existing servicing centers and train more employees to handle the EV repair
properly, this might reduce the service costs.
● Educating Customers: They can reach out to the customers letting them know the benefits of
sustainable products and how Rivian is aligned with sustainable practices, with a focus on the
environmental effect of their automobiles. Clear information on initiatives to reduce environmental
effect and the usage of products that are environmentally friendly may boost brand loyalty.
● Improve Marketing: Rivian should improve its marketing by emphasizing its commitment to
environmental sustainability, highlighting the positive impact of its vehicles on reducing
emissions, and displaying notable practices like solar energy use and recycling initiatives.
Strengthening these messages will better connect the brand with environmentally conscious
consumers and enhance its appeal in the competitive electric vehicle market.
● Strategic Partnership with TSMC: Rivian should go for a Strategic Partnership with the World’s
largest producer of semiconductor chip -Taiwan Semiconductor Manufacturing Corporation
(TSMC) because it will secure the production and supply of 175K units of chips that will see the
production 175K fleets of their vehicles (King, 2022).
● Optimize Price of Products after global expansion: The car price for R1S and R1T are very
high because of the premium quality. However, Rivian will achieve superior efficiency in near
future if they expand. So, reducing the price of the product and parts will accelerate customer
demand.
● Management Contract to assist Direct to Consumer Sales: Rivian is facing problem to meet
the customer demand in time because of supply chain issues and direct to consumer sales.
Although, the supply chain issues has been solved, the car production is ramping up 2023.
However, the customer demand for the product is still difficult to meet. In this case, Rivian can do
management contract for inventory management.
● Shift to LFP Batteries: For Rivian to return to the market stronger than before, it is recommended
they should shift to LFP batteries. While these batteries lack in power density compared to cobalt-
 26

manganese-nickel based Lithium batteries, they can be charged more than twice as many times
during their productive lifetime (Stern et al., 2023). As a result, they will be much cheaper to build
and be a better alternative for the environment.

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 28

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