Rivian Q4 FY2021 Earnings Call 3-10-22

[mgc0216]

Lol this thread is reminding me why I don't come to this forum anymore. The people here are too out of touch with reality for my liking – it's just 100% useless speculation in every post. I have no problem bursting everyone's bubble and dragging them outside to see the bigger picture.

It really amazing how many folks on here are experts in supply chain logistics, software development, large scale manufacturing, AND managing a hyper-growth startup while still holding primary jobs in completely unrelated field.

If only they were running Rivian, all of us would have had our trucks by now.

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[moosehead]

This place ain't so dark....

 

[ironpig]

50% of canceled orders have not sought reinstatement…

fingers crossed!

 

[bac4uw]

Ewwww... I'll take Russ wearing a Broncos jersey over this...

 

[bd5400]

The 25k includes current constraints and potential issues over the next year, suggesting it is a conservative estimate and not just based on what they are seeing right now.

 

[manitou202]

I don’t even get that. Don’t automakers order months to years in advance from projected production? I thought semiconductors are produced for companies who contract them that way, and not just-in-time?

Everything I have read said automakers got walloped during Covid because they cut semiconductor orders because they forecasted wrongly and lead times are 9-12 months for new order, but Rivian already had a good base of orders to draw from?

At the moment, if you go to order 10k of a high demand chip, it might have a lead time of 40 months. It's crazy out there.

Rivian and their contract manufacturers who assembly the boards, probably weren't able to pre-order enough parts to meet demand.

 

[bd5400]

Q&A done. RJ making final remarks now.

Which was basically just a thank you. Call over.

 

[mgc0216]

At the moment, if you go to order 10k of a high demand chip, it might have a lead time of 40 months. It's crazy out there.

Rivian and their contract manufacturers who assembly the boards, probably weren't able to pre-order enough parts to meet demand.

And if there is scarcity manufacturers are going to ship to their largest most established customers, as RJ noted Rivian is lower in the pecking order because they don't have established relationships.

 

[Zoidz]

I don’t even get that. Don’t automakers order months to years in advance from projected production? I thought semiconductors are produced for companies who contract them that way, and not just-in-time?

Yeah you don't get, you are right about that. Yes they DO order months and years ahead. But in a GLOBAL SUPPLY CONSTRAINED system, you could have ordered 10 years ahead, and you will still be in the same situation.

I posted in another thread a detailed explanation of how/why this is happening. I'll see if I can find it and link to it.

 

[Canthoney]

It really amazing how many folks on here are experts in supply chain logistics, software development, large scale manufacturing, AND managing a hyper-growth startup while still holding primary jobs in completely unrelated field.

If only they were running Rivian, all of us would have had our trucks by now.

I definitely don’t envy their position. Must be nearly impossible to scale up in normal conditions let alone during this Covid/war conditions. As someone who is not in that industry, I have no idea what it would take for them to scale, but I think they’re doing about as good as job as they can at the moment

 

[Kmann1994]

It really amazing how many folks on here are experts in supply chain logistics, software development, large scale manufacturing, AND managing a hyper-growth startup while still holding primary jobs in completely unrelated field.

If only they were running Rivian, all of us would have had our trucks by now.

Hahahahahaha I'm dying ? You summed it up better than I could.

And with that, farewell Rivian Forums. See you again in (hopefully) 9 months when I get my truck.

 

[Canthoney]

At the moment, if you go to order 10k of a high demand chip, it might have a lead time of 40 months. It's crazy out there.

Rivian and their contract manufacturers who assembly the boards, probably weren't able to pre-order enough parts to meet demand.

That’s my guess as well, or at least that’s what I’ve read. Maybe because they weren’t a tier one manufacturer and a start up they weren’t given priority.

 

[moosehead]

Initial impressions:

The good: New COO announcement next week, focus on production ramp, technology to include 800v though unclear details whether that is just future gen

The bad: supply chain especially semis is going to be difficult reality for Rivian and all manufacturers and bigger gatekeeper than Rivian start up lines in Normal

The ugly: bloviating and platitudes have to end, Rivian needs to start scoring

R1S: did not hear much on near term production and deliveries but RJ said it has been fun to drive the past 3 months and this afternoon's SH letter features a few RS1 pics.

 

[Zoidz]

I’m not an expert, I’m just making my armchair analysis like anyone else on this forum. I have just heard RJ in the past say that chip production wouldn’t be as great of constraint as he is saying now.

I would have thought the whole point of Ford partnering with them, as well as Amazon, was to get better relations set up with suppliers so they could get priority in the parts they needed years ago. But like I said I don’t know anything, I’m not trying to start anything on here. I want them to succeed

Hre's the scenario, from another thread where I posted this. Now repeat this scenario for 5 or 10 parts on an Rivian and THAT'S what they are facing.

Since "chips" are the frequent problem, let's use that as an example. First off, everyone assumes it's computer chips/microprocessors that are the problem. Partially, but it's also 50 cent voltage regulators and 1 cent capacitors - identical components used in everything from cars to video games to Keurigs to IV infusion pumps.

A foundry can pump out hundreds of thousands of devices a day. If that foundry shuts down for a week due to COVID, we are talking a shortage of MILLIONS of devices. MILLIONS. Starting to see the problem?

At this time, it appears Rivian is not vertically integrated on circuit board fabrication, although they are doing some of their own design from what I have read. So they are contracting with companies like Foxconn, Infineon, etc. to manage the details of chip and board fab/assembly, etc. For example, 18 months ago, Rivian would have said "Hey Infineon, we need 2,000 TLE984x Smart Lift window controller assembled boards per month starting in July 2021." It's a bit more involved than that, but it works for this discussion. So Infineon builds this into their bulk orders for custom foundry production of the Smart Lift window controller chip, and "off the shelf" components from bulk component suppliers.

But wait - there's a freeze in Texas that shuts down foundries, an earthquake in Japan destroys a foundry that takes 6 months to bring back online, COVID shuts down foundries across the globe creating shortages of TENS OF MILLIONS of "generic" components, and demand increases for electronics because everyone is working from home. Then more COVID shutdowns, etc.

So now, Infineon can't get the TLE984x Smart Lift window controller chip for 5 months, and a voltage regulator shortage causes additional delays once the window chips are avaialble.

This is how it works......... Is this Rivian's fault???? They placed the order 18 months or two years ago.

 

[Cosmacelf]

"Reading message boards can lead to a dark place" ?

Most accurate statement made during the conference call! The guy feels me, ya know?

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