Rivian Layoff 10% Staff and Lowers Production Forecast for 2024

[RivianMatt]

I want to start my post by saying that over the last week, I've fallen back in love with my R1S all over again (and, I had probably fallen out of love with it). I love the new suspension tweaks - All Purpose - Moderate seems to be what I've been looking for. Additionally, as I write this, my family and I are on our first vacation with the R1S since we took delivery in mid-September: we're on a ski vacation at Lake Tahoe. I've seen Rivians everywhere on this road trip, and I've really been impressed with how well our R1S has handled this road trip. It's just been a joy to drive the past few days.

With that out of the way...

1) I don't think any of us can be surprised with this news if we've been closely following the news. For a variety of reasons, Rivian has a demand problem. When coupled with an expense problem, Rivian is going to need a very steady hand guiding it over the next few years. I hope RJ and his team are up to the task.

2) I hope the layoffs don't impact the service centers. The SCs are the most customer-facing employees that Rivian has right now. We all know how long it is taking for service appointments; Rivian can't let that get worse.

3) I have a question - or maybe an observation - about the loss per vehicle sold. Traditionally, gross profit on any item sold - be it a car or a widget - is the sales price of the vehicle less direct costs associated with manufacturing and selling that vehicle. But what about post-sale costs that can be directly attributed to a specific R1S or R1T? I'm one of the many whose R1S was unfortunately in a SC for several weeks. In my case, it was to replace a failed air suspension and air compressor. Throughout that time, Rivian paid for my rental car. Are the expenses associated with this - such as the new suspension, the new compressor, the rental car, the labor to fix my car - deducted from margin that Rivian has earned on my specific R1S? I'm curious more than anything else.

4) Even if the answer to the prior question is that these costs are not included in the "loss per vehicle sold" figures that Rivian is publishing, obviously a key way to reduce overall expenses is to reduce manufacturing defects. I presume that Rivian is watching this like a hawk. The mobile service tech that I spoke to at one point told me that Rivian learns from every service issue. I truly hope that's the case. Someone said earlier in this thread that taking a breather this year might give Rivian a needed opportunity to improve its manufacturing processes. I hope that happens

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[Hillbilly]

I disagree.
You can get Rivians with the credit. Just need to lease or get lower trims. But, you can still get it. In fact, you can lease almost any EV and get the full credit. Tesla has greatly been helped by the IRA.
I don’t see how IRA has hurt EV adoption any worse versus the prior program that had phased out many brands.

That legislation sucks balls. You're doing mental gymnastics to say that if we bought shittier trims (which wasn't an option for all of us, not to mention the battery origin requirements) we'd still benefit some.

Point is that every single rivian buyer was in a better position before that
legislation passed.

 

[R1TS]

Considering that R1 is the best selling in 70k+ price range, not sure how much more room there is to grow further unless the overall EV market expands at a faster rate with interest rates trending down. A lot depends on incremental EDV sales from non-Amazon customers in F25. The two year gap for R2 is going to be significantly hard to deal with in the absence of clear growth path for R1. This prompted analysts to question if there is a way to bring R2 launch forward. It was almost as if everyone has thrown in the towel on growth prospects for R1

One question that wasn’t raised in potential global expansion for R1. Ofcourse this comes with associated costs but high sticker price items like Lotus Eletre have gained decent sales globally. If the EV winter lasts longer and EV credits are revoked due to change in administration, things might get harder and Normal plant might have to run at less than half its capacity.

It looks like EV9 could even sell more than R1S this year.

 

[R1TS]

That legislation sucks balls. You're doing mental gymnastics to say that if we bought shittier trims (which wasn't an option for all of us, not to mention the battery origin requirements) we'd still benefit some.

Point is that every single rivian buyer was in a better position before that
legislation passed.

Then lease.

Shittier trims? Those “shittier trims” are going to outsell the quad trim by multiples soon.

 

[Hillbilly]

Then lease.

Shittier trims? Those “shittier trims” are going to outsell the quad trim by multiples soon.

I don't lease. It also wasn't an option.

 

[R1TS]

I don't lease. It also wasn't an option.

Thankfully, lease is an option now.

And, leasing is an even better option than buying new outright. Two to three years of lease payments is equal to the depreciation hit after just a few months of purchasing thanks to Rivian passing on the IRA tax credit and the inflated residuals they use.

Though buying used is the best way if buying since the 1 year depreciation is so high.

 

[Twitter Fingers]

I want to start my post by saying that over the last week, I've fallen back in love with my R1S all over again (and, I had probably fallen out of love with it). I love the new suspension tweaks - All Purpose - Moderate seems to be what I've been looking for. Additionally, as I write this, my family and I are on our first vacation with the R1S since we took delivery in mid-September: we're on a ski vacation at Lake Tahoe. I've seen Rivians everywhere on this road trip, and I've really been impressed with how well our R1S has handled this road trip. It's just been a joy to drive the past few days.

With that out of the way...

1) I don't think any of us can be surprised with this news if we've been closely following the news. For a variety of reasons, Rivian has a demand problem. When coupled with an expense problem, Rivian is going to need a very steady hand guiding it over the next few years. I hope RJ and his team are up to the task.

2) I hope the layoffs don't impact the service centers. The SCs are the most customer-facing employees that Rivian has right now. We all know how long it is taking for service appointments; Rivian can't let that get worse.

3) I have a question - or maybe an observation - about the loss per vehicle sold. Traditionally, gross profit on any item sold - be it a car or a widget - is the sales price of the vehicle less direct costs associated with manufacturing and selling that vehicle. But what about post-sale costs that can be directly attributed to a specific R1S or R1T? I'm one of the many whose R1S was unfortunately in a SC for several weeks. In my case, it was to replace a failed air suspension and air compressor. Throughout that time, Rivian paid for my rental car. Are the expenses associated with this - such as the new suspension, the new compressor, the rental car, the labor to fix my car - deducted from margin that Rivian has earned on my specific R1S? I'm curious more than anything else.

4) Even if the answer to the prior question is that these costs are not included in the "loss per vehicle sold" figures that Rivian is publishing, obviously a key way to reduce overall expenses is to reduce manufacturing defects. I presume that Rivian is watching this like a hawk. The mobile service tech that I spoke to at one point told me that Rivian learns from every service issue. I truly hope that's the case. Someone said earlier in this thread that taking a breather this year might give Rivian a needed opportunity to improve its manufacturing processes. I hope that happens

Yes, the service center fixes of defects is part of the gross loss and something Rivian is trying to fix with this massive simplification of the vehicle and parts supplier changes coming in April..

 

[Hillbilly]

Thankfully, lease is an option now.

And, leasing is an even better option than buying new outright. Two to three years of lease payments is equal to the depreciation hit after just a few months of purchasing thanks to Rivian passing on the IRA tax credit and the inflated residuals they use.

Though buying used is the best way if buying since the 1 year depreciation is so high.

That's great, but I only buy new so that I know exactly how the vehicle was treated and what's happened to it and I keep all my vehicles for at least 10 years.

The only time used would come into play is for a classic car or something that's simply not available anymore.

None of that changes the point that the legislation didn't improve the situation for any of us.

 

[R1TS]

That's great, but I only buy new so that I know exactly how the vehicle was treated and what's happened to it and I keep all my vehicles for at least 10 years.

The only time used would come into okay is for a classic car or something that's simply not available anymore.

None of that changes the point that the legislation didn't improve the situation for any of us.

Thankfully, others can lease now for 3 years for less than the loss in value by buying new.
And, that’s due to the IRA.

 

[Hillbilly]

Thankfully, you can lease now for 3 years for less than the loss in value by buying new.

Let me guess, you keep your cars for longer than 3 years, though?

I've never kept a vehicle for less than 10 years/250k miles.

 

[LetsgoRIVN]

How low do you expect the stock price ? Hard to believe it’s trading near ATL (during COVID mind you!)

 

[jjswan33]

It looks like EV9 could even sell more than R1S this year.

Lots are full of them out here in Oregon, dealers are offering $3500 off MSRP and Kia is offering $3750 cash back. Doesn’t feel like they are selling that fast.

 

[mkhuffman]

Honestly, they need to start charging us for data usage and other services, just like Tesla does (with the understanding that they will continue to improve the services) and they need to open up the RAN to other cars. We can’t expect for them to succeed financially, and provide us free services.

Like the free NACS adapters. It is fiscally irresponsible to give them away for free. They need to charge enough to make it a profitable item, not another huge expense.

 

[emoore]

That legislation sucks balls. You're doing mental gymnastics to say that if we bought shittier trims (which wasn't an option for all of us, not to mention the battery origin requirements) we'd still benefit some.

Point is that every single rivian buyer was in a better position before that
legislation passed.

Didn't the old registration expire? So they had to do something or there would be nothing at all.

 

[LetsgoRIVN]

Elon is at on X, predicting Rivian bankruptcy in 6 quarters!

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