CONCERN: RIVN have enough cash to to go beyond 2025 and launch R2?

[SDH]

You cannot keep issuing debt and halving your stock price AND continue to produce vehicles (at scale)

Yes, you can actually. They can keep tapping the capital markets all they like, which they will, it's just a case of 'at what price'. They can dilute the heck out of equity holders if it means getting $ in the coffers and in the worst case, they look for strategic partner (again, the more desperate they are, the better price the buyer will get).

Off the top of my head, buyers/strategic partners include:
- Private Equity
- Sov Wealth Funds
- Dodgy Russians or Saudis
- Elon Musk or Jeff B
- A N Other car company

If you want a case study ... look at Aston Martin. Yes, not pretty for shareholders, but the cars still get made and name does not disappear form the Earth.

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[Zorg]

They will definitely need to raise cash, and the sooner the better. I wouldn't be surprised if they did it right after the R2 reveal, using the buzz to get more cash. They need to spend another $3-4B for the new plant and their cash burn is out of hand. 10% RIF may be a little light frankly.

 

[Gr8Barn]

I would say the larger question is can any specialty car manufacturer survive on relatively low volume? Rivian is domestic do they need to be selling around the world and how can you do that without a global manufacturing footprint. I have had 5 teslas (S, 3P, YP, 2Xs) and one Fisker and an RT1 quad w large pack and by far the RT1 is my favorite. I have a founders edition Cybertruck coming and I am really excited to compare with RT1 - I'll be shocked if I like the Cyber as much as the RT1. But no they don't have enough cash to shut down production in the 2nd quarter, and build a new plant in Georgia, and continue investing in research and development. Zero hope for Fisker and Lucid unless someone merges all three together to make a Tesla competitor - call it United EV of America! one note to ponder: Tesla gets about 10,000,000 miles of driving data per day from the cars they have built and are on the road - who can duplicate that??? Who can catch up to that??? Elon needs to be kind and buy these guys. Again I love the RT1 w 835 hp and 347 mile cruising range.

Good points. As a multi-TEsla owner as well, I would say that I really like my R1S (and to some extent, better than Tesla). It would be interesting to see if TSLA were to buy RIVN. I am sure we will see some consolidation int eh EV space as Lucid and Fisker will not make it.

 

[Electrified Outdoors]

He is being very careful with his words. I would expect this from any CEO. No one can predict the future with 100% certainty. What I heard him say was they're very confident and that they feel like they can go to the capital markets if needed.

Rivian is responding and adapting quickly. I'm happy with what they are doing.

Obviously it's not good that folks are losing their jobs it's an unfortunate part of any business.

 

[Twitter Fingers]

Of course they need to raise cash, that math has been obvious for quite a while now. Ideally they will get a loan from the DOE rather than diluting equity holders more.

 

[Gr8Barn]

Yes, you can actually. They can keep tapping the capital markets all they like, which they will, it's just a case of 'at what price'. They can dilute the heck out of equity holders if it means getting $ in the coffers and in the worst case, they look for strategic partner (again, the more desperate they are, the better price the buyer will get).

Off the top of my head, buyers/strategic partners include:
- Private Equity
- Sov Wealth Funds
- Dodgy Russians or Saudis
- Elon Musk or Jeff B
- A N Other car company

If you want a case study ... look at Aston Martin. Yes, not pretty for shareholders, but the cars still get made and name does not disappear form the Earth.

Aston Martin is in a league of its own. Rivian/EV's are fairly mainstream and even with government support, still cannot drive demand. The EV market is crowded. They need scale to drive prices down which will drive demand. Shutting down a factory for weeks will not help drive costs down meaningfully enough to create profitable demand.

 

[Twitter Fingers]

Aston Martin is in a league of its own. Rivian/EV's are fairly mainstream and even with government support, still cannot drive demand. The EV market is crowded. They need scale to drive prices down which will drive demand. Shutting down a factory for weeks will not help drive costs down meaningfully enough to create profitable demand.

And what data did you use to come to that conclusion? Shutting down the factory comes along with hundreds of part changes that will reduce the materials cost significantly, over 30%. What's your definition of meaningful? Of course they will wait until their bill of materials is significantly reduced before cranking up the output to full scale. We won't see R1's full potential until 2025. For investors, that's a long way out, but the company is fine.

 

[bdwalters]

Rivian needs to find a buyer. I really wish Tesla would jump in. Tesla has the cash, they need more product, and they are good at cost reduction. It’s a good fit. I could see a Chinese buyer as well.

Fisker and Lucid are done.

 

[Oldsmobile_Mike]

At this point, Rivian should just raise $5B now. I bet the share price would actually go higher afterwards. Relief from the capital overhang being over.

On that note, who's buying stock this morning? ??

 

[LetsgoRIVN]

RJ and CFO keep repeating 30% cost saving from Q2 shut down + 10% saved from salaries. Some math:
Cash burn is around 5bn, 30% of that is $1.5
2024 starting cash is 10bn
2024 ending should be 10 - (5-1.5) = 6.5
2025 starting cash should 6.5
2025 ending should be 6.5 - (5-1.5) = 2.5

assuming that 2024 and 2025 production is only 57k for both years then Rivian should have around 2.5mn in cash left. Now you can play with assumptions by increasing deliveries and cost savings.

 

[Chewy734]

Can’t they increase the really low $100 reserve price on the R2? I suppose they need a lot more money than what that’d bring.

 

[kylealden]

I think people are overstating the need to panic. There's still runway to growth and the plan is still sound - it's just that the margin for error is narrowing.

One path out is tremendous execution on the R2 ramp-up and cost cutting on the R1 lines.

To the extent that the above is not sufficient, additional fundraising is an option, though it has a price.

To the extent that the above is not sufficient, something more drastic like and SPAC or other buyer/patron is a possibility.

But something to keep in mind in all of the above is that the lower their value dips, the more attractive they become to more traditional buyers that might never have considered them at another price point. Consider players like Apple, who have long wanted to launch an EV brand but have struggled to build momentum; or Amazon, who are already significantly invested and could transform their investment overnight with a significant discount at today's valuation. Or even other manufacturers like Ford that have struggled to get their legs under them in this space and are looking for more differentiated offerings.

Rivian is as far from a sure thing as ever, but I don't think they're anywhere near disappearing in a puff of smoke. Bear in mind that Fisker and Lucid are still kicking around despite being in much more dire positions on all fronts - strategy, product, finances, etc. If anything, I'm looking at $11 shares and thinking that's a pretty attractive buy.

But yeah - this shit is hard.

 

[GHuff]

One path out is tremendous execution on the R2 ramp-up

you mean the factory that is currently rough graded? The question is will they be able to survive until 2027 when R2 sales finally start occurring.

 

[kylealden]

you mean the factory that is currently rough graded? The question is will they be able to survive until 2027 when R2 sales finally start occurring.

Yes, it's almost like the first ten words of my argument don't represent the entire point.

 

[waitingonanr1s]

On that note, who's buying stock this morning? ??

Bought another $7k at 11.17. Already up to 11.48!

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