Rivian Layoff 10% Staff and Lowers Production Forecast for 2024

[White Shadow]

Pretty sure the $XX,000 "loss per vehicle" is always a misleading number that takes total amount Rivian has ever spent (including Georgia plant, years of R&D) divided by number of vehicles sold. People need to stop treating it like a marginal loss. Every additional vehicle sold makes that number better, not worse. Correct me if I said anything inaccurate.

The idea is to scale. So as they increase the number of vehicles sold, the loss per vehicle should come down. But it doesn't always work that way.

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[pricedm]

Starting later this year... RAN will be opened to non-Rivian so that they can access federal funding.

Long overdue IMHO so Rivian can access federal funds to expand the Rivian charging network. And get the Rivian name in mainstream/corporate media, "hopefully" to Rivian's benefit-- some positive media exposure.

As a shareholder, I'm happy to see the Rivian waypoint L2 chargers are now not free. A minimal $0.15 - 0.25 kWh for L2 charging is appropriate.

 

[emoore]

They're not dead but the notion from the EV owners that they're the best thing since sliced bread is

That's because of China, which they own their own market.

It's a niche market when the big sellers scale back development. I get the cheerleading though.

don't think so. By the end of the decade EVs will make up the majority of new cars.

but I guess we can just agree to disagree.

 

[White Shadow]

The R2 reveal timeline is no accident. Rivian is banking on getting a lot of reservations and positive PR for the brand. Based on the price point, it will also bring in a lot of new eyes and massively expand the potential customer base.

The crucial issue is, Rivian will need to be able to show that customers are lining up for the R2 and demand is there. They will use this data to earn the additional investments or capital needed to sustain operations until R2 can be ramped.

If R2 fails to generate interest in 2024 things will be a bit more shaky.

This is exactly right.

 

[White Shadow]

Why are you assuming that because they are losing money for every vehicle they sell that will be the case going forward. Tesla was in the same boat for many years and they eventually got to making a profit. It's going to take time with a startup.

I'm not assuming that. I'm a shareholder. I wouldn't be a shareholder if that's what I thought. What I'm saying is that they need to get to profitability and that's going to take years. RJ is wrong about Q4 2024. I'd bet anyone ALL of my Rivian shares that I'm right, even though they are nearly worthless at this moment in time.

 

[White Shadow]

Yep sounds about right. I think they had a quarter or two before 2020 where they were profitable. 2020 is their first entire year of profitability. Maybe Rivian can shave a year or two off that since they have EVDs and Tesla didn't. So we are looking 2027-2028 for a few quarters and then 2029-2030 for the first year of profitability.

Tesla also had very little competition and a different economic situation. It's not apples to apples, unfortunately. I guess only time will tell.

 

[emoore]

Tesla also had very little competition and a different economic situation. It's not apples to apples, unfortunately. I guess only time will tell.

I would argue that it was harder for Tesla than it is now. EVs were nearly non existent and there was a lot of pressure from legacy car makers to kill Tesla. Also batteries were a lot more constrained than we are now.

 

[SRO]

This is the most concerned look I've seen on RJ to date. He knows the future is uncertain.

Very indirect answers to the questions. Don’t think the stock could survive another capital increase.

 

[White Shadow]

Is this really relevant to their bottom line? How much do ICE manufacturers actually make on service under the current dealership model? I suppose they make some money on parts but I think of the service revenue benefitting dealers more than the manufacturer?

Yes, dealerships make money off of service. But where do you think dealerships buy the parts that they use to repair/service cars? From the manufacturers. You don't have to trust me, you can research it yourself, but the money isn't in selling a car, it's in servicing it over the next 12 years.

 

[Tahoe Man]

don't think so. By the end of the decade EVs will make up the majority of new cars.

but I guess we can just agree to disagree.

I wouldn't extrapolate future sales curve from the initial 20% slope. The next 20% is going to be much more difficult.

It reminds me when politicians in California state they will forbid gasoline vehicle sales in ten years...right.

 

[emoore]

I wouldn't extrapolate future sales curve from the initial 20% slope. The next 20% is going to be much more difficult.

It reminds me when politicians in California state they will forbid gasoline vehicle sales in ten years...right.

Not if you assume an S curve like a lot of technology and new products. Slope will be much greater than it is now.

 

[NY_Rob]

I am hopeful that the public will wake up and realize that the R1S and R1T are definitely worth every penny.

I don't think public perception of Rivian is a problem, the number of pennies required to purchase current Rivian vehicles is the main obstacle to ownership at this time. There is a finite number of people who have and are willing to spend $80-$100K on an EV at this time when the median selling price of a vehicle in the USA is $48K.

 

[White Shadow]

don't think so. By the end of the decade EVs will make up the majority of new cars.

but I guess we can just agree to disagree.

Going from, say 9% to more than 50% in 6 years (I'm talking about in the U.S.) is going to be tough. I'd say more like impossible. I just don't see it happening. There's too much anti-EV sentiment out there. The only way I see that happening is if the government steps in and forces EV sales by banning ICE sales. That could potentially happen, but not by the end of this decade.

 

[C12farmer]

Beautiful!
I wonder why did they pick Q2 and Q3 to shut down the lines, why didn’t they do in Q4 23 since they knew Amazon wouldn’t take delivery!

Their parts suppliers were not ready in Q4 23. It take a lot of time to validate and then start producing new automotive parts.

Even in the call they mentioned that there will be several thousand vehicles produced but not deliverable. They will wait for a new part to be delivered in April.

 

[White Shadow]

I don't think public perception of Rivian is a problem, the number of pennies required to purchase current Rivian vehicles is the main obstacle to ownership at this time. There is a finite number of people who have and are willing to spend $80-$100K on an EV at this time when the median selling price of a vehicle in the USA is $48K.

Exactly right. I was on the fence for quite some time about replacing my Grand Cherokee with an R1S. Ultimately, I decided to take a "wait and see" approach. A new Grand Cherokee spec'd the way I'd want it would be sticker about $65K and I could buy it for about $60K. An R1S the way I'd want it would cost me about $92K, so about $30K more. It's not a HUGE difference in price, but it is significantly more. And at the end of the day, I realize that Rivian is continuing to improve their vehicles, so it made more sense for me to wait before jumping in the pool. And with NACS coming, there's no way I'd buy a Rivian until it comes with a native NACS port, so there's that to consider as well. Hell, I might even end up waiting until we see 800V architecture too, but who knows when that's going to happen. I probably won't wait forever, but I'm still willing to wait until these vehicles get better and the infrastructure improves as well, which of course NACS should definitely make a positive impact for sure.

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