My unsolicited five step plan for saving Rivian

[Rividiculous]

...a little off topic, but how many pre-price reservations do you think remain unfulfilled today? What's keeping these people from completing their order?

Some of us aren’t in a rush and after waiting for 2 years figure it’s worth waiting for the R1 refresh.

I just hit pause—would have happily taken it in December or January, but I also don’t go buy a new iPhone right before an update. (And I try to keep my phone for at least 5 years.)

I’m sure others have different reasons.

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[jjswan33]

Rivian needs to build vans with AWD and huge batteries so I can justify Rivian #3

That's the smartest thing I have seen written on this thread!

Also if they offered leasing in my state that might justify an upgrade for my soon to be out of warranty Rivian.

 

[Fmc]

...a little off topic, but how many pre-price reservations do you think remain unfulfilled today? What's keeping these people from completing their order?

There is still a HUGE misconception on EVs.. there is a learning curve to some extent on owning an EV. A friend wanted a lyriq but could not comprehend charging and travel. But another friend owns a taycan and despite recalls and service will continue to buy EVs.

also I park in a garage everyday. Close to 30% of Americans are in multi family dwellings. Personally 10 years ago I could not have owned an EV.
In my view until there is more education on EVs, the market will remain small.
however everyone who rides/drives an EV is blown away. I tell anyone who has two cars in a family to at least test drive an EV.

 

[R1Tom]

Some of us aren’t in a rush and after waiting for 2 years figure it’s worth waiting for the R1 refresh.

I just hit pause—would have happily taken it in December or January, but I also don’t go buy a new iPhone right before an update. (And I try to keep my phone for at least 5 years.)

I’m sure others have different reasons.

I don't fault your decision at all. What I do fault is the messaging Rivian or their service center supposed leaks, have cost them current sales....like you.

 

[E_Monkey]

As a long time Rez holder that went from Quad Max pack to the residual offering available in my config a deadline like that would have me walk away and never look at Rivian even if they survive and were the best truck maker in perpetuity.

Despite being an older holder I kept waiting until the Max pack details and test drives were available. The original
Pack was supposed to be 180kwh. Then the specs changed, then power tonneau never came back all while rates went up.

If the promised battery came to be would have just bought off the Shop long ago. At this point my last main need is a power tonneau as I don’t think the manual is worth the $ or hassle. Rates are up and while I can afford
It, the economic utility is down, more rate cost at less vehicle utility is a problem to me. I don’t buy vehicles often as they are just a horrible use of money in general, so
Yeah I want what I want, and many ways to check those boxes. There is the human side to demand beyond the bean counters.

I didn’t over promise the battery specs, delay the max pack, deprioritize large builds vs reservation order. Yet as a long term supporter those like myself just get dinged.

A deadline would be nail in the coffin for my journey with Rivian. Too many nice alternatives, not EVs but alternatives coming along with their own strengths. The Lexus GX and Toyo Land Cruiser look sweet, the perennial favorite Tacoma in Overtrail trim will likely hold value and reliability super well.

I don’t know if freezing preorders would save the company. They have a demand destruction problem with rates. It would be a positive contribution to their operating margins, wouldn’t really make a difference in the end. They need to sell 20-30k thousand units more a year. I doubt there is that many preorder holdouts like myself left.

This is a product that should have come out 2 years pre Covid. Any rate drops will be measured, this is a 2-3 additional year rate cycle before rates make a material difference to demand. Even if they squeeze out $10k extra per vehicle by getting rid of preorder holdouts, volume and reduced Op Ex is what they need.

The previous post on pausing the factory build makes the most sense. I am not an industrial engineer but ideally if they could just flip the current factory to build R1s and R2s in clusters would seem financially efficient. They don’t need to spend cash on a new building without proving the demand of a $60k vehicle is there. Most of the auto industry is hurting, a cheaper expensive option as the solution is a big assumption to make. This is just the Econ cycle playing out. They need to a plan to last through the vehicle given lower sales. Someone at that price point would still be rate sensitive and demand capped. The smaller size is a different use case and buyer with their own efficient frontier on purchasing. I don’t think R2 buyers will go to R1s materially due to pricing.

Another thing they really need to look into, re-diversify the employees they currently have, and implement a hiring freeze. They have 10000 open jobs posts sitting on their website. What good is laying off 10% of the staff, if they just rehire others in other areas.

And focus on getting the service centers staffed correctly. Waiting 3-6 months in some cases for repairs is insanity.

 

[R1Tom]

On #5: they've already established their off-road bonafides with the R1T/S with the quad motor variant. Going by your logic vis-a-vis cost cutting, how does it make sense to advocate for creation of a cheaper, feature-reduced mall crawler while simultaneously advocating that they redirect money/resources toward optimizing the R1 line for a niche market (off-roading) that they are currently performant and well established in? They already have a strong brand identity; doing what you're advocating for would not only be a poor allocation of resources, but it would also cheapen their line of halo-vehicles and lessen the distinction between the premium R1 line and mass-market R2.

Regarding R2 production, I agree that they should start production sooner and scale faster, which I fully expect them to do. I'd bet that the volume of R2 reservations will sufficiently arm them for the next round of capital raising, which is inevitable, and that they might even announce an acceleration of their R2 manufacturing plans at that time. I wouldn't be surprised if they use some of their currently-vacant Normal Plant space to start limited manufacturing of R2 by EOY 2025 and slow further scaling of R1 production (but not decrease overall annual production volume forecasts). Doing so will allow them to subtly redirect capital/resources from R1 to R2, broadcast that they're bringing R2 to market faster, and actually do so at a limited scale while working out manufacturing kinks. Done correctly, which I believe they are well equipped to do, every one of these things will boost investor confidence dramatically and resolve many of the survivability concerns that currently exist.

They are not in the kind of dire straits that require them to resort to the things that you are advocating for. Provided that they unveil an R2 that successfully appeals to the largest segment of the automotive market (crossovers/mid-sized SUVs), which they are expected to do, they're going to be able to chart a reasonable path to profitability for investors and get the funding they need. The scope and success of their next capital raise won't determine if they survive; quite the opposite, it will determine their timeline for scaling and reaching profitability.

I agree. Most on these forums it seem really want efficiency and not virtual lockers. 21's and max mileage. That and the extreme off road off camber is DM strength. For on road....which is the majority of market, I would take a QM with torque vectoring anyway...

Keep capitalizing on the full range the R1 can fulfill from great family hauler, to off road capable machine, to on road beast. May hats the R1 can wear....and that is the way to sell them.

 

[beyondgravity]

Some of us have spent time consulting with, and/or working inside of, Fortune 500 businesses undergoing turnarounds. Do enough turnarounds and you find some common themes. It's not a formulaic plan, you match the actions to the symptoms.

My plan may or may not be correct, I have no inside knowledge to your point. But from what I can see on the outside, and again with the benefit of 30 years of doing these things and generally needing to triage in the first 30-45 days (that's all you get) and put corrective actions in place, I have some informed perspectives that I thought I'd share. You're welcome to indulge in the thread or not, no worries either way.

Enjoy your R1 in good health, they are incredible machines regardless of what happens with the business.

Same here, been a strategy consultant before coming back to industry; as we say in consulting. Let me give my perspective, since I am on this thread.

Rivian is not going to be successful by cutting cost. I think this is to appease the analysts that Rivian is serious about containing the costs.

They are also not going to be successful by innovating around current offerings of R1. There is not enough demand and will not be until interest rates drop.

As in any strategy to be successful, you need to go all in or go home. They need to figure out the R2 platform. They accelerating R2 maybe to retool and incorporate R2 in retooling; just maybe.

I agree with you on that one thing, they need to accelerate R2 and out compete Tesla in mass market. Rivian has compelling offer and RJ seems to be a level headed guy, I sincerely hope, it stays as an independent company, innovates and becomes successful. Again, I am not in automotive business; but I love my R1S machine and need to head out for lunch to show off.

 

[TollKeeper]

Your first and second paragraphs directly contradict each other. You want them to do a hiring freeze and focus on getting service centers staffed?

Not if they re-diversify the current staffings...

 

[Autolycus]

Can someone just leak a photo of the R2 interior so we can move on from the doom and gloom?

Be careful what you wish for. If the photo suggests there isn't a glove box and doesn't confirm that APPL CarPlay is coming, the doom and gloom might get worse.

 

[Dark-Fx]

Be careful what you wish for. If the photo suggests there isn't a glove box and doesn't confirm that APPL CarPlay is coming, the doom and gloom might get worse.

Just keep MKBHD away from it.

 

[vandy1981]

Be careful what you wish for. If the photo suggests there isn't a glove box and doesn't confirm that APPL CarPlay is coming, the doom and gloom might get worse.

The R2 steering wheel is a squircle. SELL NOW!

 

[Rividiculous]

I don't fault your decision at all. What I do fault is the messaging Rivian or their service center supposed leaks, have cost them current sales....like you.

To be fair, it was RJ who told me the chromatic roof and heat pump were slated for Q2 when I asked him about them at an event in July.

I hope they can adjust production accordingly. If they shift some production to after the refresh/shutdown, that’s better for Rivian financially.

 

[RivChris]

Why haven’t they started charging us for the LTE connection? As an owner I don’t want it but as a shareholder I’m wondering what the hold up is?

 

[R1Tom]

To be fair, it was RJ who told me the chromatic roof and heat pump were slated for Q2 when I asked him about them at an event in July.

I hope they can adjust production accordingly. If they shift some production to after the refresh/shutdown, that’s better for Rivian financially.

Then he should be more careful saying stuff like that. Nothing says "don't buy one now.....you should see what we have right around the corner"...like those kinds of statements.

 

[shap]

Why haven’t they started charging us for the LTE connection? As an owner I don’t want it but as a shareholder I’m wondering what the hold up is?

Maybe they already pre-paid for this anyway. So they just do not care...

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