In a landmark moment in the Electric Vehicle industry, Rivian has agreed to adopt the charging mechanism used by Tesla. This furthers Tesla’s attempts to become the industry leader and set the standards that are adopted by the entire EV industry worldwide. It is also a much-welcome move from the perspective of the customers as it provides them access to the biggest US charging network.
What Does This Mean For Tesla and Rivian?
The variations in charging ports and mechanisms have been a cause of much worry for EV customers worldwide. Following this decision, Rivian’s customers will be able to access 12,000 Tesla Superchargers in Canada and the USA from as early as 2024. Rivian would be able to leverage the charging mechanism built by Tesla. This would help it avoid capital investment without adversely affecting its sales. It would be able to spend the same money on product innovation and marketing.
At the same time, Tesla would benefit by becoming the industry leader. This announcement marks the biggest stimulus to Tesla’s efforts to set industry standards. Tesla has also entered into similar agreements with General Motors and Ford. Such agreements also imply more customers being created for Tesla’s charging stations. The buyers of EVs from General Motors, Ford, and Rivian would also be recharging their cars at Tesla’s stations, thereby adding to Tesla’s revenue. Tesla can leverage economies of scale thereby bringing down the recharging cost.
However, the variance of charging standards continue to be a pressing issue worldwide. The Biden administration, for example, has been promoting the Combined Charging Standard, Tesla has been pioneering its own charging standard which it has named the North American Charging Standard. At the same time, China and Japan have been pushing their own charging standards. For the global EV industry to prosper, uniformity in global EV charging standards is a necessity.
