All discussion of Rivian Automotive

[ZachF]

Not talking this year. Yes, basically what’s the path to profitability. With Tesla it was 3/Y.

Rivian can possibly get there with just trucks … but Lucid ? May be they will just become a niche luxury car maker for Saudis

BTW, that opex for Rivian is mind boggling and almost same as Tesla opex now !

If I were Rivian, I’d aim for the Subaru/Jeep type niche.

I hope Rivian can get these costs down… 22k vehicles is about $1.6b in revenues, but they spent like $1.7b in cash just last quarter. They have a giant war chest but it won’t last forever.

 

[Doggydogworld]

BTW, that opex for Rivian is mind boggling and almost same as Tesla opex now !

726m R&D is about the same as Tesla but 682m SG&A is less than half. Each include 277m of stock comp charge that sound one-time-ish.

Opex also included a 663m donation (20m cash plus 1% of their shares) to their Forever fund. That's definitely one-time, related to their IPO.

They're betting big. Cash shouldn't be a problem if they manage to ramp production. If they don't.... ouch.

 

[EVNow]

Same as with Tesla. Next is the Gravity, which is a Model X competitor.

Then there will be a Model Y competitor. There is also a Model 3 competitor planned but probably not needed. The move from sedans to CUVs will likely continue.

Lucid isn't planning to make 400k Airs in Arizona plus 400k Airs in Saudi Arabia.

Lucid is also planning a pickup eventually.

So, a direct competitor to Tesla. May work out .... but odds are low. I think lower than the odds for Tesla - which atleast had a first mover advantage.

BTW, being a Saudi funded company is a problem too, politically. KSA and MBS aren't exactly popular. The way they are snubbing US during the Ukraine war can have lasting consequences.

 

[EVNow]

726m R&D is about the same as Tesla but 682m SG&A is less than half. Each include 277m of stock comp charge that sound one-time-ish.

Opex also included a 663m donation (20m cash plus 1% of their shares) to their Forever fund. That's definitely one-time, related to their IPO.

I've have to look more carefully at opex, but what I heard was, if you remove one time charges (from both Tesla because of CEO comp & Rivian because of IPO), they are similar. If true - that is mindboggling.

 

[Cosmacelf]

Same as with Tesla. Next is the Gravity, which is a Model X competitor.

Then there will be a Model Y competitor. There is also a Model 3 competitor planned but probably not needed. The move from sedans to CUVs will likely continue.

Lucid isn't planning to make 400k Airs in Arizona plus 400k Airs in Saudi Arabia.

Lucid is also planning a pickup eventually.

Rivian is planning both smaller and larger pickups and SUVs. Plus a Subaru WRX competitor.

Regarding Rivian opex to my surprise they are going full bore with their own FSD competitor and planning making their own cells soon. It appears they are hiring talent in South Korea for their cell division.

At what point do you think Rivian or Lucid are stock buys?

 

[NickInLab]

I've have to look more carefully at opex, but what I heard was, if you remove one time charges (from both Tesla because of CEO comp & Rivian because of IPO), they are similar. If true - that is mindboggling.

From page 15 of the FY2021Q4 Rivian shareholder letter, we have (in Millions):

	Total	One-time-ish (SBC & donations)	Difference
R&D	726	277
SG&A	682	277
Other	633	663
Total Opex	2071	1217	854

From page 30 of the Tesla shareholder letter, we have (again, in millions):

	Total	CEO SBC	Difference
R&D	740	0
SG&A	1494	245 Edit: +340
Other	0	0
Total Opex	2234	245 585	1649 ​

So, Rivian's ongoing opex expense is quite significantly less than Tesla's--they're spending only [43% Edit] 52% as much. I still view that as fairly concerning, given that they stated the upper bound for production this year (25k) is less than 1/10th what Tesla does in one quarter (300k).

To put that 25k in context, at an ASP of $75k Rivian will generate less than 2B in revenue against their (annualized) 3.4B in opex... and that doesn't count cost of sales (which are somehow 8x their revenue). Even with a (generous) GM of 25% on an ASP of $95k (suppose they fulfill only orders taken after the price rise fiasco), gross profit is only ~0.5B.

So they're going to burn at least $3B in cash this year, assuming very generous things about their manufacturing prowess and no further expansion of opex.

 

[EVNow]

From page 15 of the FY2021Q4 Rivian shareholder letter, we have (in Millions):

Are you removing all SBC from Rivian but not Tesla? Why?

You need to add some employment tax Tesla paid for Elon comp.

Ps :

See at 8:20 here. Rob says if you exclude SBC and one time expenses Tesla and Rivian have similar Opex.

 

[NickInLab]

At what point do you think Rivian or Lucid are stock buys?

Personally, I would need to see:

1. Positive GM (both companies currently have COGS > 8x revenue). If you're taking a loss on each unit, volume doesn't help you.
2. "Reasonable" (whatever that means) production expansion. They either need to start hitting their targets, or fail to hit really agressive targets. Right now they're failing to hit sandbagged targets.

For both companies, I would prefer them to also "pull a Tesla" and demonstrate a quarter of net profit before committing to the next factory expansion.

Edit re #1: I'm eagerly awaiting the FY22Q1 report to see production #'s, revenue and COGS. From that, I think we can extrapolate per-unit COGS scaling.

 

[NickInLab]

Are you removing all SBC from Rivian ? Why?

Because doggydogworld claimed they were OTEs. Rivian doesn't claim they are (that I can see), but keep in mind that SBC is a non-cash expense in all cases.

You need to add some employment tax Tesla paid for Elon comp.

Happy to edit my post to add that if you can provide the number. I didn't easily find it in the deck.

 

[EVNow]

Because doggydogworld claimed they were OTEs. Rivian doesn't claim they are (that I can see), but keep in mind that SBC is a non-cash expense in all cases.


Happy to edit my post to add that if you can provide the number. I didn't easily find it in the deck.

See my edits and video link.

 

[MP3Mike]

appy to edit my post to add that if you can provide the number. I didn't easily find it in the deck.

 

[MP3Mike]

Because doggydogworld claimed they were OTEs. Rivian doesn't claim they are (that I can see), but keep in mind that SBC is a non-cash expense in all cases.


Happy to edit my post to add that if you can provide the number. I didn't easily find it in the deck.

You need to remove another $313M of SBC, since you only removed a portion of Tesla's SBC, but all of Rivian's:

 

[NickInLab]

And why don't you remove all of the SBC like you did for Rivian?

View attachment 779625

Because I ctrl-f'd for "sbc" not "stock-based", so I didn't see it the first time.

Tesla doesn't break out SBC into the various Opex buckets, so it will make the table a bit of a mess if I go back and edit it now.

I'm getting tired of this. It's clear that Rivian's opex is highly concerning, but not "as high" as Tesla's. If you feel differently, why don't you present the number you feel are relevant in a concise format?

 

[NickInLab]

You need to remove another $313M of SBC, since you only removed a portion of Tesla's SBC, but all of Rivian's:

View attachment 779627

I actually don't need to do anything. I don't appreciate the accusatory tone, so I'm going to log out for now. See ya.

 

[MP3Mike]

I actually don't need to do anything. I don't appreciate the accusatory tone, so I'm going to log out for now. See ya.

I wasn't accusing you of anything. But if you want to compare apples-to-apples you need to include all of the SBC for both companies.

It does seem that Rob missed $277M of Rivian's SBC, so his comparison was off a bit. So it is more like $854M vs. $1336M. (Or Rivian spending ~64% as much as Tesla for OpEx in 2021 Q4.)

 

[KJD]

I wonder which is more likely to survive, RIVN (Jeffery Besos's personal plaything) or LCID (Saudi state-owned enterprise).

I actually think that RIVN has some decent product. All they really need to do at this point is figure out how get that product to the customer.

 

[Mengy]

Out of Spec Motoring got their R1T finally, and they have a LOT of tests and vids planned with it. Happy to see we are starting to get some freelance media people giving us looks at the truck:

 

[RobStark]

Sandy Munro purchased a R1T to teardown. In part by request of viewers of his youtube channel.

Now that it has been delivered he said he can't tear it apart. He wants to keep it as a personal vehicle.

 

[zecar]

Rivian doesn't seem to be planning on making a profit on retail vehicles.

 

[Darmie]

Rivian doesn't seem to be planning on making a profit on retail vehicles.

Doesn't sound sustainable. So they'll make enough off of commercial and do service and charging networks?