Nissanman
Member
surprising indeed! I didn't even know they had their own charging network... another money pit!!
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All discussion of Rivian Automotive
- Thread starter RobStark
- Start date
mspohr
Well-Known Member
Nissanman
Member
Tesla's "money pit" of establishing the supercharger network has made them a lot of money over the last 10 years, and has been a substantial differentiator in the market as a whole. Rivian has multiple money pits, including their charging network, that may sink them in the end. I hope not! It's very very very hard to start a new car manufacturer. But I fear the worst
Tesla's "money pit" of establishing the supercharger network has made them a lot of money over the last 10 years, and has been a substantial differentiator in the market as a whole. Rivian has multiple money pits, including their charging network, that may sink them in the end. I hope not! It's very very very hard to start a new car manufacturer. But I fear the worst
Rivian owners will have access to the Tesla Supercharger Network next year so Rivian has zero "need" to establish their own network. They will only spend the money if they have it.
Tesla had multiple money pits in the beginning.
Every automaker not named Tesla has a less than 50% chance of still making cars in 2050 IMO. I like Rivian's chances better than most. There financials are improving.
Nissanman
Member
"They will only spend the money if they have it..." True! They've had a TON of investors money and have blown a TON of it... Based on their massive losses per vehicle built, I don't think they're going to be around in 2030, let alone 2050. But it's easy to be a naysayer (which I'm being about Rivian)... You're right that it's very hard to make it as a new car maker. I think publicly traded companies take unecessary risks and spend money too lavishly... Have seen it over and over again. I was one of the founders of a company that made it, privately held, very small scale (about 100 employees today). We had to be profitable within 15 months or we would be out of our own hard earned investment money. Rivian and other publically traded electric companies blow through other people's money with a tiny hope for a return on investment. (Look at Workhorse electric vehicles...). I do hope they make it though, really like the products...
Nissanman
Member
PS - forgot to ask - what were the multiple money pits at Tesla in the beginning? (genuine question, I can't recall what these were if you're not referring to the cars themselves and the supercharging network...)
mspohr
Well-Known Member
Rivian CEO's plan to make EVs cheaper starts with their computers | TechCrunch
Rivian CEO RJ Scaringe said that changing ECU architecture in its vehicles will be the No. 1 cost savings for the company.
techcrunch.com
“By far the biggest is the ECU consolidation,” Scaringe said when asked what the No. 1 cost savings opportunity would be for Rivian over the next six months. “The ability to consolidate ECUs is not a few $100, we’re talking multi-thousand-dollar savings, to move to, you know, a fraction of the number of computers in cars than what we’ve historically seen.”
Rivian, like its predecessor Tesla, has developed its own ECUs and software. As part of the hardware upgrade, which will roll out to its R1 vehicles next year, the company is switching to a so-called zonal control architecture. This means that instead of an ECU having a specific role, the computers are tasked with zones or regions within the vehicle. The result is a reduced number of ECUs and improved efficiency. It’s also easier to manufacture and gets rid of lots of extra wiring.
During the company second-quarter earnings call in August, Scaringe said the company plans to reduce the number of ECUs in its vehicles by 60% and the wiring harness length by 25%.
" Irvine, California, October 2, 2023: Rivian Automotive, Inc. (NASDAQ: RIVN) today announced production totals for the quarter ending September 30, 2023. The company produced 16,304 vehicles at its manufacturing facility in Normal, Illinois and delivered 15,564 vehicles during the same period.
These figures remain in line with the company’s expectations, and it believes it is on track to deliver on the 52,000 annual production guidance previously provided."
These figures remain in line with the company’s expectations, and it believes it is on track to deliver on the 52,000 annual production guidance previously provided."
Doggydogworld
Active Member
52k would be a big letdown. Even if Q4 production is flat with Q3's 16.3k that's 56k for the year. They should end up around 58k.
While impressive, still loosing 35K per car/truck is not a positive direction. Basically making more of nothing. The only winner was the CEO making 370 million salary for making no profit??
Tesla CEO was compensated ~$10B before Tesla made consistent profits.
Ramping production and sales while not cutting prices during a period of high interest rates and Tesla slashing prices is heading in the right direction.
Rivian is currently manufacturing at ~25% capacity. Industry benchmark for turning a car factory profitable is 62-66% capacity.
bkp_duke
Well-Known Member
But Tesla made consistent profits if you backed out R&D and CapEx for Gigafactories., both of which were large because of scaled attempts to grow Those were the drag. The actual profit per car before things like that was there from the get go.
It's not with Rivian, not yet.
adiggs
Well-Known Member
Maybe my geometry is off - do Rivians have their charge port on the right side instead of the left? I'm not seeing how a Tesla with trailer will be able to charge at this charger without the usual dance of dropping the trailer nearby, and then returning for it.
Rivian (RIVN) raises production goal again after strong Q3 earnings beat
Rivian (RIVN) released its third-quarter earnings after market close Tuesday, showing strong results as production and deliveries picked up. Earnings...
electrek.co
It was an interesting conference call. When asked point blank about things like when will margins be positive, or when will you finally get to the end of selling your vehicles at that stupid discount, they simply wouldn’t hazard a guess.
I find it hilarious that all these new EV manufacturers (and I’m including legacy auto) has metrics like “our negative gross margin loss per vehicle is declining”. Tesla never had such ridiculous results since they always had positive gross margins (except for a tiny amount one quarter). So RJ gave us quite the story about how margins will be improving due to a litany of reasons (not selling vehicles at the old price, better pricing from suppliers, engineering changes, increased factory utilization), but net net, there is still no end in sight of negative gross margins, let alone an operating profit.
Oh, and Amazon won’t be taking deliveries of the commercial van in Q4, and ramping new commercial van customers is going to take quite a while since everyone wants to do long pilot programs before buying in volume (Maybe sell them at retail? Don’t know why no one asked that question).
And Rivian will shut down production in Q4 for a week to prepare for a really big shut down that will impact 24Q2 and 24Q3 and only after that restart will they enjoy better supplier pricing and engineering cost reductions. They at least did say they are looking at a 35% cost reduction with that factory restart. Of course all that factory downtime will demolish factory utilization and cost them a lot in GAAP earnings.
And I think I heard the R2 platform won’t be ready until 2026?
So, 24Q4 should be a good quarter if things don’t slip between now and then, and the auto industry slowdown doesn’t hit Rivian’s high priced products in the shorts. And Cybertruck doesn’t kneecap the R1T. Actually, who am I kidding, the R1S is the only product selling well at Rivian these days.
So while I would love to own another EV stock, I just can’t see Rivian being the one if even management doesn’t know when negative gross margins will end.
I find it hilarious that all these new EV manufacturers (and I’m including legacy auto) has metrics like “our negative gross margin loss per vehicle is declining”. Tesla never had such ridiculous results since they always had positive gross margins (except for a tiny amount one quarter). So RJ gave us quite the story about how margins will be improving due to a litany of reasons (not selling vehicles at the old price, better pricing from suppliers, engineering changes, increased factory utilization), but net net, there is still no end in sight of negative gross margins, let alone an operating profit.
Oh, and Amazon won’t be taking deliveries of the commercial van in Q4, and ramping new commercial van customers is going to take quite a while since everyone wants to do long pilot programs before buying in volume (Maybe sell them at retail? Don’t know why no one asked that question).
And Rivian will shut down production in Q4 for a week to prepare for a really big shut down that will impact 24Q2 and 24Q3 and only after that restart will they enjoy better supplier pricing and engineering cost reductions. They at least did say they are looking at a 35% cost reduction with that factory restart. Of course all that factory downtime will demolish factory utilization and cost them a lot in GAAP earnings.
And I think I heard the R2 platform won’t be ready until 2026?
So, 24Q4 should be a good quarter if things don’t slip between now and then, and the auto industry slowdown doesn’t hit Rivian’s high priced products in the shorts. And Cybertruck doesn’t kneecap the R1T. Actually, who am I kidding, the R1S is the only product selling well at Rivian these days.
So while I would love to own another EV stock, I just can’t see Rivian being the one if even management doesn’t know when negative gross margins will end.
I guess I am a Musk fanboy. It still rankles me that I remember RJ saying something to the effect (a couple of years before production start) that Rivian‘s mgmt were industry professionals with Smarts and Degrees and Experience and that they would run an EV startup Properly unlike a certain other unnamed EV company. RJ hasn’t been as annoying as Rawlinson, but he still has his moments.
Has RJ apologized for being so off base? Or admitted it? Say what you will about Elon, but he usually admits mistakes (when they are actually mistakes).
Maybe RJ isn’t saying anything because of the lawsuit alleging that Rivian execs hid that they needed to raise vehicle prices before the IPO. Personally, I think the lawsuit has merit (I usually hate shareholder strike suits like this):
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Rivian must face lawsuit claiming it defrauded IPO investors over vehicle prices
A federal judge said Rivian Automotive must face a lawsuit claiming it defrauded shareholders during and after its blockbuster 2021 initial public offering by concealing that had underpriced its electric vehicles, leading to unpopular price hikes.
www.reuters.com
mspohr
Well-Known Member
People keep saying this but Tesla had negative EBIT until 2020.
Tesla EBIT 2010-2023 | TSLA
Tesla annual and quarterly EBIT history from 2010 to 2023. EBIT can be defined as earnings before interest and taxes. <ul style='margin-top:10px;'> <li>Tesla EBIT for the quarter ending June 30, 2023 was <strong>$2.399B</strong>, a <strong>2.64% decline</strong>...
www.macrotrends.net
EBIT is not the same thing as gross margins.
