Summary of Webcast w/ Rivian CFO, Including R2 News & Other Good Info

[DuoRivians]

Here’s a summary from today’s webcast with Claire McDonough, Rivian CFO. Some good info!

Claire McDonough, Rivian CFO, Webcast Summary

Supply Chain Unlocks

• Powerchain semiconductors is a current bottleneck. Introduction of Enduro motors allows Rivian to get into a powerchain semiconductor surplus situation in H2 2023.
• The reason is that semiconductors used in Enduro motor inverters can be more flexibly sourced

Normal Capacity

• In 2024, aim to build 85K R1 variants (max current capacity is 150K units/yr)
• EDVs are currently built in a single shift

EDVs and Amazon

• One of the bottlenecks for Amazon accepting more vans faster is Amazon's rollout of charging infrastructure at last-mile delivery hubs
• Relationship with Amazon remains "incredibly strong"
• Rivian exclusivity is through 2026

Georgia Plant

• In 2026, begin with 200K R2 capacity
• Additional 200K capacity will come online at an unspecified time

R1 Future Pricing

• Rivian expects average selling price to increase over time, b/c consumers are opting for higher priced packages
• Rivian sees an opportunity to make the top-end pricing even better

R2

• R2 is a platform that will have many variants built on top of it
• It will be a global scaling platform
• Most premium R2 pricing will likely be less than the cheapest R1 pricing
• Unit economics planned from Day 1 to be more "normal"
• While R2 could launch with a more premium mix first, the priority is on the cost structure

Getting to Profitability

• Rivian expects to be gross profit positive in H2 2024
• 2/3 of this is achieved through higher volume
• 1/3 of this is achieved through reduced material costs (e.g. LFP battery, enduro motors), supplier contract renegotiations, higher average selling price
• Pre-order pricing will be largely exhausted and fulfilled in 2023

Why No Longer Disclosing Backorder Size

• Rivian found that the size of the backorder was the single biggest deterrent from customers' placing reservations

IRA

• R1: Because of premium pricing, hard to get people to qualify for IRA tax credits. But opportunity exists for commercial fleet customers.
• R2: Being built from the start with battery sourcing in mind so that customers can qualify for the full $7500
• RAN Charging Network: Rivian expects to participate in Federal funding beginning in 2024. Rivian plans to open the RAN to other car manufacturers to further receive Federal funding. Up to 80% of costs can be recouped via Federal funding.

Bigger R Truck?

• Off the table at this time

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[COdogman]

Wow. Lots of news in that one! Interesting she said the highest priced R2 will be less expensive than the cheapest R1. I figured there would be overlap there.

Also interesting the Enduro motors play such a big role in solving the chip problem.

 

[Ralph]

Thanks for the summary; very interesting.

 

[zipzag]

Love the specifics

 

[kurtlikevonnegut]

Excited to have many variants built on the R2 platform. I wonder if they will move to a single wheelbase size with R2 instead of a different wheelbase with R1 between S and T to have better interchangeable parts. I have to think a single frame with 2-3 skateboard variations for all R2 vehicles would represent a massive cost savings for them.

 

[Zoidz]

Thanks for posting. This one is very telling and illustrates why Rivian wants to end the exclusivity agreement. Rivian can buld more EDVs than Amazon is accepting currently:
"One of the bottlenecks for Amazon accepting more vans faster is Amazon's rollout of charging infrastructure at last-mile delivery hubs "

 

[DuoRivians]

Thanks for posting. This one is very telling and illustrates why Rivian wants to end the exclusivity agreement. Rivian can buld more EDVs than Amazon is accepting currently:
"One of the bottlenecks for Amazon accepting more vans faster is Amazon's rollout of charging infrastructure at last-mile delivery hubs "

Good news is that the exclusivity period is only through 2026, not 2030. But yeah, sooner the better.

 

[kurtlikevonnegut]

Thanks for posting. This one is very telling and illustrates why Rivian wants to end the exclusivity agreement. Rivian can buld more EDVs than Amazon is accepting currently:
"One of the bottlenecks for Amazon accepting more vans faster is Amazon's rollout of charging infrastructure at last-mile delivery hubs "

Exactly. We already know that they can produce EDVs more quickly than R1 vehicles based on max output numbers. Knowing that they are likely only going to deliver 10k to Amazon this year really helps underscore the lower production estimate.

I wouldn't be surprised if Q2 numbers are similar to Q1 but then there is a significant jump in Q3 when they shift focus to Enduro models and Q3/4 are much higher numbers than 1/2.

 

[DuoRivians]

Exactly. We already know that they can produce EDVs more quickly than R1 vehicles based on max output numbers. Knowing that they are likely only going to deliver 10k to Amazon this year really helps underscore the lower production estimate.

I wouldn't be surprised if Q2 numbers are similar to Q1 but then there is a significant jump in Q3 when they shift focus to Enduro models and Q3/4 are much higher numbers than 1/2.

Rivian hardly built any EDVs in Q1, so all of the 9K was practically R1 vehicles. If Rivian ramps up R1 production (alongside enduro motor boost) plus the 10K in EDVs, it’s possible they produce 60K total this year.

R1 vehicles:
Q1: 9k
Q2: 10-11k
Q3: 12-14k
Q4: 13-16k
Annual: 44k-50k

EDVs: 10k

Total: 54-60k

 

[shrink]

These comments stick out to me:

• Rivian expects to be gross profit positive in H2 2024
• Pre-order pricing will be largely exhausted and fulfilled in 2023

Really hope the gross profit projection is accurate and will be monitoring their progress.

If pre-order pricing is fulfilled in 2023 why are are so many still with 2024 estimated deliveries? Perhaps the 2023 2nd quarter update will bring many good news? I'm personally thinking of switching my 2nd preorder made in 11/2021 to either a Max Pack Dual Motor R1S or R1T, but waiting for the configurator to give me those options.

 

[1T2022]

lots of positive stuffs.

 

[Zoidz]

These comments stick out to me:

• Rivian expects to be gross profit positive in H2 2024
• Pre-order pricing will be largely exhausted and fulfilled in 2023

Really hope the gross profit projection is accurate and will be monitoring their progress.

If pre-order pricing is fulfilled in 2023 why are are so many still with 2024 estimated deliveries? Perhaps the 2023 2nd quarter update will bring many good news? I'm personally thinking of switching my 2nd preorder made in 11/2021 to either a Max Pack Dual Motor R1S or R1T, but waiting for the configurator to give me those options.

Let's see what happens with the schedule refresh this month, perhaps everyone moves forward to 2023?

 

[Autolycus]

I can help with that semi-conductor shortage if they'll let me switch to a dual-motor R1S and give me a small price-break, similar to what they offered to R1T Max pack pre-orders...

 

[Guy]

Let's see what happens with the schedule refresh this month, perhaps everyone moves forward to 2023?

I think this was said because the R1T pre March backlog will be exhausted before the end of the year and most of the S backlog too so that leaves maybe 25% of pre March holders outstanding so technically true to say most done by end of year.

some other takeaways:
They said they saw a higher priced R1 model. I would assume like the Plaid or Sapphire. Do four enduro motors, add some special trim pieces and you have a $120-150k vehicle ready to go with much increased margins.

It was nice to see a 2024 projection but a shame the factory will be barely at half capacity in 2024. As for Georgia it won’t be until 2027 or later that they get to 200k. They have worked with Munro so the cost structure, through lean design, will be better. I wonder what is planned in Q4 with the “new technologies” and optimization of production that the spoke of in the Q4 call.

 

[fotoflux]

These comments stick out to me:

• Rivian expects to be gross profit positive in H2 2024
• Pre-order pricing will be largely exhausted and fulfilled in 2023

Really hope the gross profit projection is accurate and will be monitoring their progress.

If pre-order pricing is fulfilled in 2023 why are are so many still with 2024 estimated deliveries? Perhaps the 2023 2nd quarter update will bring many good news? I'm personally thinking of switching my 2nd preorder made in 11/2021 to either a Max Pack Dual Motor R1S or R1T, but waiting for the configurator to give me those options.

I think the reason it seems like so many people are stuck in 2024 is because the people that are upset tend to post and the people that are happy tend not to. I mean, you'd think that nobody would be buying a Rivian because 'everyone' is super pissed that there is not CarPlay based on how many posts are dedicated to it. But in fact, the vast majority of people are still happy to buy the car because of all the other awesome potential it offers even without CarPlay.

But back to my main point. Most of the pre-orders with fixed pricing may still be built in 2023, but there are outliers. Folks in areas far from service centers, folks in states with anti-competitive laws making it harder to sell direct-to-consumer, up until recently max-pack pre-orders, etc....

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