Rivian Layoff 10% Staff and Lowers Production Forecast for 2024

[DuoRivians]

I think Rivian’s leadership team knows how to make great products. I love my R1T and it’s the best car I’ve driven.

But, I’m not convinced that this leadership team knows how to run a profitable company or get there. I’d like to consider myself a patient investor. But, my confidence has diminished after today’s earnings call.

Notably, I feel like the team can:

- Act with a greater sense of urgency where they can, eg open up RANs now and charge money to all, get data subscriptions going asap
- Provide more details on the potential size and scope of these RDV pilot programs. RJ mentioned that they can bear fruit in 2025, but what are we looking at? Potentially 5K, 10K, or 20K RDVs per year, besides Amazon?
- Pay more attention to the stock price. I don’t mean to suggest micro-managing the price, but setting proper expectations and giving more transparency along the way.

I’m venting a bit, but feeling very frustrated as an investor.

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[DuoRivians]

Unless they could invent the time machine and change timing... There's really nothing to be done but stay the course, do the best they can to meet their time table, and hope for the best? I mean, isn't that how it is in life for anyone?

Is it possible to spend $1B at the Normal plant and put in an R2 line there? And start shipping these cars in 2025?

 

[UnsungZero_OldTimeAdMan]

Is it possible to spend $1B at the Normal plant and put in an R2 line there? And start shipping these cars in 2025?

Anything is possible. But who are we to say and dictate? It isn't our butts in the pilot seat.

 

[White Shadow]

Time to buy more stock

Not for me. I'm done. The road to recovery is likely to take more than a decade, and unless it goes to a penny stock, buying more isn't going to lower my average price per share enough. I'm not yet convinced that Rivian will survive.

 

[COdogman]

Is it possible to spend $1B at the Normal plant and put in an R2 line there? And start shipping these cars in 2025?

I’m no manufacturing expert but I don’t see how that would be possible. They have already expanded the factory a bunch and even with that there is very little wasted floor space. It also doesn’t seem like there is enough land left on that property to add another high volume line IMO.

If they were going to do something other than build in GA I bet they could buy an existing failing factory like they did in Normal. Maybe Lordstown?

 

[White Shadow]

Sadly, this was predictable.

However, I think the Standard and Standard+ packs and the lower entry point when coupled with the dual motor puts R1's into a better demand space. Unfortunately, that $75-85K space is saturated -- and getting worse:

- Macan EV
- Volvo EX90
- Polestar 3
- Cadillac Lyriq
- Hummer EV 2

What else? Could be too many vehicles chasing too few buyers - at least until interest rates drop.

It really feels to me like interest in EVs isn't growing at the pace I expected. It seems that most of the enthusiastic early adopters have already jumped in. It's the speculators who don't seem to be jumping in and I think there are a lot of different reasons for that. But I guess time will tell. I think the government will need to keep incentivizing EVs to help drive demand.

 

[Zoidz]

...
As pessimistic as it seems, his words echo a broader economic sentiment that you would find if you read about other sectors in the economy. The key indicators are all over the place. No one knows exactly what to make of it. Uncertainty is rampant. Caution is abundant, even with the fed (if you listen to what they say). Plus, this is an election year. And what you find in the market in any election year is uncertainty. His words may not be what you wanted to hear, but it's not out of line from the broader landscape. If he painted a rosy picture while everyone else is sounding cautious, I would be worried.
...

^^^ This ^^^

Everyone can express their disappointment in Rivian, "evasiveness" by RJ, etc. I challenge anyone here to confidently predict where even a single narrow, niche sector of the current economy is headed, let alone the complex, heavy manufacturing consumer product market that RIvian/RJ must navigate, subject to government incentives and goals that are now being reconsidered and modified? The following links are provided not to be political, but rather to illustrate the uncertainty RJ & Company are trying to deal with.

NY Times April 2023 - The Biden administration is proposing rules to ensure that two-thirds of new cars and a quarter of new heavy trucks sold in the United States by 2032 are all-electric.

Reuters Feb 2024 - U.S. President Joe Biden's administration is set to ease proposed yearly requirements through 2030 of its sweeping plan to aggressively cut tailpipe emissions and ramp up electric vehicle sales, two sources told Reuters on Sunday.


We've got the Fed working hard to slow the economy the past two years. Despite what they say, the hard fact is that slowing the economy is going to result in layoffs in some sectors. So now the layoffs come across several markets but everyone is disappointed in Rivian? If the world's economists can't figure out where the economy is headed, why do people criticize RJ for being vague?

 

[DuoRivians]

Is it possible to spend $1B at the Normal plant and put in an R2 line there? And start shipping these cars in 2025?

You’re right. But investors determine the share price, and the share price can affect Rivian’s long term viability via how easily Rivian can raise future capital.

As an investor, I guess I’m feeling less confident that Rivian’s planned trajectory to long term profitability is going to play out like they foresee.

 

[White Shadow]

Nope, there have been doom and groomers asking the same question since the first one left the assembly line. They have billions in cash and are opening a 2nd factory. They aren't going anywhere.

And they are losing $30k on average with every vehicle they sell. Rivian is burning through cash at an alarming rate.

 

[R1Tom]

You’re right. But investors determine the share price, and the share price can affect Rivian’s long term viability via how easily Rivian can raise future capital.

As an investor, I guess I’m feeling less confident that Rivian’s planned trajectory to long term profitability is going to play out like they foresee.

I agree and why it is so important to reduce workforce to match demand. It sucks....and I feel for all that will get the bad news tomorrow am.....very much.....but long term viability requires getting this matched as much as possible as quick as possible.

 

[White Shadow]

they aren't going to be profitable until they start selling a lot of R2 vehicles. I would guess sometime in 2026 or even 2027.

Tesla needed 17 years to become profitable. No way will Rivian become profitable with the next three years.

 

[DuoRivians]

I’m no manufacturing expert but I don’t see how that would be possible. They have already expanded the factory a bunch and even with that there is very little wasted floor space. It also doesn’t seem like there is enough land left on that property to add another high volume line IMO.

If they were going to do something other than build in GA I bet they could buy an existing failing factory like they did in Normal. Maybe Lordstown?

Normal has a 150K production capacity for R1 + EDVs.

In current market conditions, Rivian isn’t portraying a confident picture that they can sell 150k of these vehicles per year, in any combination of R1 and EDVs. (If Rivian is confident, I beg of them to communicate and show that please!)

So, would it be possible to allocate 80k of floor space to R1 + EDV. And, the rest for R2 units? If they could, I think even getting 50-70K/yr of R2 production capacity in Normal would be viewed very favorably by the markets.

 

[LetsgoRIVN]

It seems to me that most people agree that Rivian has great products but is ran inefficiently. RJ would be a great CTO or chief engineer but not as a CEO, he is not the crazy genius type like Elon, Zuckerberg, Jensen nor the corporate guy.

 

[emoore]

Tesla needed 17 years to become profitable. No way will Rivian become profitable with the next three years.

not from when they stared selling the S. Much less than 17 years.

 

[Zoidz]

Is it possible to spend $1B at the Normal plant and put in an R2 line there? And start shipping these cars in 2025?

I've been pondering this since I read about the layoffs. Rivian could certainly beneift by shipping the R2 sooner. It's theoretically possible that they could shift R2 production to Normal, but I'm not sure it would provide a significantly quicker launch.

We don't know if Normal has room "under roof" to install a new line. If they have to build new buildings, there's no advantage at all. But let's assume the Normal facility has "under roof" space for new lines, or they chose to rework one existing R1 line for the R2. Here are just some of he challenges:

- Work Force - Are there enough people available in Normal at this point to hire for an R2 line with the expected volume?
- Plant Floor Machinery - Rivian provided the equipment manufacturers with a delivery timeline. Could those manufacturers speed up their production to deliver the equipment faster?
- OEM Suppliers - Rivian provided their OEM suppliers with a timeline for delivering components. Could those OEMs speed up their timeline to meet a shortened Rivian timeline?

My gut feelings are that these obstacles would make it quit difficult to produce the R2 in Normal significantly faster than the Georgia factory timeline.

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