Rivian Layoff 10% Staff and Lowers Production Forecast for 2024

[SANZC02]

The general tone I got from analysts on the call yesterday was one of exhaustion. It’s like they were hearing the same story, but the numbers weren’t adding up. FWIW, I don’t think the analysts cared one bit about the layoffs. That is, they cared a lot more about the falling demand story than one of runaway costs.

I hear what you are saying, I think part of their effort to mitigate some of that are the new lease options. R1T starting at 559 and R1S starting at 639 puts these vehicles in the budget range for a lot more people. They just need to get the leases available in more locations.

They have options that will get both R1S and R1T under the 80k number for the 3750 tax credit. They are planning on getting the R2 eligible for the full 7500, if that is using the LFP pack and they can get that into the R1 sooner to make it eligible for the full 7500 tax credit on a purchase then that could open the door to more people. The small pack using LFP being able to charge to 100% puts the daily range really close to the large pack at 70 or 80% and could be a decent configuration for a lot of people that do not do road trips.

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[Tahoe Man]

Not sure why you bought into a startup if you were expecting to make money in a couple years. It's a long play, not to make a quick buck.

Every investor has different perspectives. Some will state they will sell for tax purposes, others state they're changing their investment objective to a long term hold, some average down, others drown their pain. Again, I get it. But I am hundred percent positive for all those holding the equity they would have rather gotten in today than at any other time.

The bears had a field day on the equity and they have been correct since the IPO. The saying on Wall Street is, don't fight the tape. My position is too small to fret over, but I still really really hate losing money, short or long term.

Again, I like EVs, I test drove the first Volt when it was introduced (what a pile of garbage) and I like Rivian.

However RJ is lost. They should have never got into charging, they should have never released a pickup, focus on SUVs only. Frankly I never understood the "adventure vehicle" thing. Worse is he's now blaming interest rates.

 

[DuoRivians]

I hear what you are saying, I think part of their effort to mitigate some of that are the new lease options. R1T starting at 559 and R1S starting at 639 puts these vehicles in the budget range for a lot more people. They just need to get the leases available in more locations.

They have options that will get both R1S and R1T under the 80k number for the 3750 tax credit. They are planning on getting the R2 eligible for the full 7500, if that is using the LFP pack and they can get that into the R1 sooner to make it eligible for the full 7500 tax credit on a purchase then that could open the door to more people. The small pack using LFP being able to charge to 100% puts the daily range really close to the large pack at 70 or 80% and could be a decent configuration for a lot of people that do not do road trips.

That’s all true re product battery mix and more leases. But, the 57K projected total production in 2024 portrays an unfortunate cap on max sales for 2024 that sucks.

Yeah, it’s possible that Rivian is sandbagging this number. If so, however, I don’t think it was a wise choice.

 

[The_Frog]

Ehhhh, on model 3 and model y, for sure. But on S, the interior only got better. Now, they were Tesla-better so no Lexus.

Not sure I agree with you here: my '16 MS has the PUP (premium upgrade package) that is no longer available and my interior is much nicer than current MS interiors, 8 years later. And it also has a pano roof

 

[DuoRivian]

That’s all true re product battery mix and more leases. But, the 57K projected total production in 2024 portrays an unfortunate cap on max sales for 2024 that sucks.

Yeah, it’s possible that Rivian is sandbagging this number. If so, however, I don’t think it was a wise choice.

Definitely agree not a great idea to sandbag the production number. I think they did that because they wanted to be sure how long the planned shutdown turns out to be and whether the efficiency gains actually pan out. If they do I then expect an upgrade to the target mid year to something in the mid 60s and much closer to analyst numbers. This long with decent (>100k) R2 reservations will help lift the share price.

 

[SANZC02]

That’s all true re product battery mix and more leases. But, the 57K projected total production in 2024 portrays an unfortunate cap on max sales for 2024 that sucks.

Yeah, it’s possible that Rivian is sandbagging this number. If so, however, I don’t think it was a wise choice.

Not sure they are sandbagging, certainly being cautous. They have been sharing this shutdown information for awhile and saying there would be a slow 3rd qtr for the ramp up after so a low forecast should have been expected, I know I expected it. There are a ton of internal changes for the builds, not only for their lines but for the suppliers as well and some are new suppliers that need time to ramp up.

They also will slow the builds going into the shutdown prepping for it as they consume what will be obsoleted inventory moving into the change. If they do hit the 30% cost savings with these changes then a flat build rate for the year would probably be like a 10% increase based on financial bottom line.

It is never a good time to stop production but seems like in the long run this should be worth the hit. My shares are just sitting there, I purchased them from my high risk bucket with a 5+ year holding expectation so I’ll see what 2026/2027 looks like and just monitor what is going on until then.

 

[mkg3]

Many of you probably remember that in the early days of Model 3, Tesla put up a temporary building/tent on the parking lot to increase the production throughput.

One of the questions, from Adam Jonas, was if Rivian has rethought the strategy from 2021 to build GA plant and R2 there versus what now. Also BofA analyst asked about if R2 could be pulled forward.

Given the space available in Normal, IL, if Rivian can expedite the tooling and design for the R2S in Normal, that would go long ways to help get the product to the market faster. They can slow down GA and focus full utilization at Normal. There is no way that the 150k vehicles/yr is needed from Normal plant, at the current market condition and demand.

I know for a fact that there is a huge metallic roof tent over the entire football field on the Harvard stadium during the winter. Rival can do similar and place it over a parking lot to facilitate R2 build and final assembly.

Maybe this approach would accelerate R2 introduction to mid 2025. They would have enough cash on hand for this. With additional cashflow from R2 sales, GA plant could be completed in phases to meet the demand. RJ said its planned for 200k vehicles initial sizing, with expansion for an additional 200k vehicles so that could still be the case and better use of Normal plant.

 

[Lrak1973]

 

[Zoidz]

I know for a fact that there is a huge metallic roof tent over the entire football field on the Harvard stadium during the winter. Rival can do similar and place it over a parking lot to facilitate R2 build and final assembly.
....

Based on how vehicles have been manufactured for the past 50+ years, this is not even remotely possible, except for perhaps mounting the tires on the rims.

Yes, Tesla did it. That does not mean Rivian should or could do it. And Telsa did not do start to finish build/assembly in a tent, which is what Rivian needs.

"The first parts of the process, where the parts are stamped and the core of the car comes together, still happen inside the factory. Once the parts have been to the paint shop, they come here for final assembly."

"According to a permit filed with the city, the tent measures about 4,000 square feet and it's meant to be used for "wrapping vehicles to protect in transit.""

 

[Zoidz]

I agree. Everyone seems to think the refresh is somehow going to make the best product even better....but I think in reality the real goal is get the cost substantially lower, which I will be shocked if that product doesn't suffer in someway. Which will then be real tough to sell unless it also coincides with a lower consumer cost.

Here's a rough analogy to what Rivian is doing - upgrading your network of 20 standalone servers, 100mb ethernet and 802.11n WIFI4 to 5 Virtual servers with 4 VMs each, gigabit Ethernet and 802.11ax WIFI6. How does that cause the product to suffer?

 

[crashmtb]

Many of you probably remember that in the early days of Model 3, Tesla put up a temporary building/tent on the parking lot to increase the production throughput.

One of the questions, from Adam Jonas, was if Rivian has rethought the strategy from 2021 to build GA plant and R2 there versus what now. Also BofA analyst asked about if R2 could be pulled forward.

Given the space available in Normal, IL, if Rivian can expedite the tooling and design for the R2S in Normal, that would go long ways to help get the product to the market faster. They can slow down GA and focus full utilization at Normal. There is no way that the 150k vehicles/yr is needed from Normal plant, at the current market condition and demand.

I know for a fact that there is a huge metallic roof tent over the entire football field on the Harvard stadium during the winter. Rival can do similar and place it over a parking lot to facilitate R2 build and final assembly.

Maybe this approach would accelerate R2 introduction to mid 2025. They would have enough cash on hand for this. With additional cashflow from R2 sales, GA plant could be completed in phases to meet the demand. RJ said its planned for 200k vehicles initial sizing, with expansion for an additional 200k vehicles so that could still be the case and better use of Normal plant.

Just because elon made his company do it doesn't mean it's a good idea.

The build quality coming out of those highly compromised conditions wasn't exactly great either.

 

[R1Tom]

Here's a rough analogy to what Rivian is doing - upgrading your network of 20 standalone servers, 100mb ethernet and 802.11n WIFI4 to 5 Virtual servers with 4 VMs each, gigabit Ethernet and 802.11ax WIFI6. How does that cause the product to suffer?

If that analogy holds up...great! And I hope it does.

 

[sacramentoelectric]

Someone should tell the 1M-ish people who slapped down preorders on Tesla’s 80k claptrap.

It’s easy to rack up refundable $100 preorders for something that’s too good to be true and started at $40k.

 

[NineElectrics]

I’m puzzled by the EDV. Amazon wasn’t buying a lot of them. Then Rivian negotiated an end to the exclusivity agreement and Amazon bought even fewer. Meanwhile, nobody has stepped up to fill the gap. It seems the economics of it are poor, or something. Do we know if it can last for a full eight hours of city stop and go, like a real UPS truck? I would expect UPS, FedEx, or DHL to snap these up. I wonder if the same quality issues I see in the R1s manifest in the EDVs, and fleets are having none of it. At this point the product looks like a failure.

 

[SANZC02]

I’m puzzled by the EDV. Amazon wasn’t buying a lot of them. Then Rivian negotiated an end to the exclusivity agreement and Amazon bought even fewer. Meanwhile, nobody has stepped up to fill the gap. It seems the economics of it are poor, or something. Do we know if it can last for a full eight hours of city stop and go, like a real UPS truck? I would expect UPS, FedEx, or DHL to snap these up. I wonder if the same quality issues I see in the R1s manifest in the EDVs, and fleets are having none of it. At this point the product looks like a failure.

Amazon only signed up for 10k a year for 100k units total, they are not obligated to take more than that.

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