“Refresh” prediction

[Glstr]

I’m predicting that the refresh is going to have a few subtle changes to distinguish it from the previous version (visually) and may have a couple design and function changes…but the focus for Rivian seems to be profitability. They aren’t losing money because they don’t have enough features or performance. They are losing money because they need to cut costs. Other auto manufacturers are priced lower and dropping prices. so I think overall the price will drop and the feature set and quality may have to drop as well. That might mean reducing features (camp speaker, quad motor option, etc). But when a company is seemingly trying to survive, I doubt the product will be a higher quality product. They have to compete on price. So feature reduction and efficiency are key. They are being hit from both sides…they are overpriced compared to competitors and they are still at a negative contribution margin per vehicle. Shutting down the factory shows you how serious the situation is for them

The slight visual difference would provide some value for those people that buy the post-refresh model to “show” they have a newer one. But otherwise I don’t expect a higher quality vehicle when cost cutting is the primary objective.

If you have a voucher, my advice is use it on a quad with a better warranty. Lease it b/c the value will drop a ton over the next few years. Get the $7500 tax credit and enjoy the ride.

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[MidnightRivian]

For pre-order holders, I think the dual motor is the best bang for the buck if you're ok with the performance. Under $60,000 before tax credits for a Rivian is just insane.

I personally would go with performance dual motor or quad motor with all terrain tires if I had a pre-order voucher.

If I didn't have a pre-order voucher, I would go with quad lease and then decided in 3 years if I want to buy the vehicle out or not. Taxes can make it a bit complicated if you live in a State where they have weird tax laws on leases.

 

[Glstr]

For pre-order holders, I think the dual motor is the best bang for the buck if you're ok with the performance. Under $60,000 before tax credits for a Rivian is just insane.

I personally would go with performance dual motor or quad motor with all terrain tires if I had a pre-order voucher.

If I didn't have a pre-order voucher, I would go with quad lease and then decided in 3 years if I want to buy the vehicle out or not. Taxes can make it a bit complicated if you live in a State where they have weird tax laws on leases.

I am not necessarily in disagreement with this option. But I think with the refresh, there will be significant depreciation. So purchase at your own risk knowing that it’s likely to depreciate fast and after 3 years you might be underwater (even with preorder pricing). I think the dual with the Standard+ as long as the battery is still software locked. Standard is a bit too low in my opinion and the standard+ option give more range, a better charging curve than large (albeit not as good as standard) and you can charge to 100% and it’s really only about 90% of the max battery capacity.

It’s the way I was leaning but with the refresh coming, it was hard to know what might be coming and if we’d get access to the new ones and if we’d want them.

If I hadn’t locked in a quad large with fre PPF, I would have probably waited until they announce the refresh changes and then upon early reviews either snag a v1 or v1.1.

 

[MidnightRivian]

I don't expect the refresh to impact depreciation much. Most of the changes are behind the scenes for cost / efficiency improvement. We might see some small changes happen that are customer facing like couple new paint colors and a less expensive Explore edition.

I can't imagine demand would go through the roof for a Rivian if you did a bigger refresh like newer steering wheel, tri-motor or slightly refresh body panels / shapes.

I believe they will save the big upgrades like heat pump and electrochromic roof for when we have a mid-cycle refresh probably around or after the R2 launch. Hopefully this time they will have a captain chair option R1S on R1T chassis with 1200 HP Enduro motors.

 

[Dustyshades]

I’they are still at a negative contribution margin per vehicle

Yeah, but actually they don’t have a negative contribution margin. If they had a negative CM, why would they want to scale up operations and produce more vehicles? That would just mean that they lose even more money. I wish people understood how this stuff actually works before they talk about it….

 

[Supratachophobia]

Yeah, but actually they don’t have a negative contribution margin. If they had a negative CM, why would they want to scale up operations and produce more vehicles? That would just mean that they lose even more money. I wish people understood how this stuff actually works before they talk about it….

Exactly.

 

[Duquesne]

A glove box!

 

[Glstr]

Yeah, but actually they don’t have a negative contribution margin. If they had a negative CM, why would they want to scale up operations and produce more vehicles? That would just mean that they lose even more money. I wish people understood how this stuff actually works before they talk about it….

Transcript from the latest earnings call transcript:
"Onto your second question around the contribution margin of the vehicles. We were very close in achieving positive contribution for current priced vehicles in Q4 and see direct line of sight, as is evidenced by our continuation of committing to our Q4 positive gross profit as we look to the future and the impact that the material cost reductions will have driven by our shutdown in Q2."

https://seekingalpha.com/article/4672203-rivian-automotive-inc-rivn-q4-2023-earnings-call-transcript

So yeah...I agree with your statement that we both wish that people understood how this stuff actually works before they talk about it. ?‍

 

[Glstr]

Exactly.

See my other response. There is a lot of bad info floating around about this. They have negative CM on average for the vehicles they are currently selling.

 

[electruck]

I don't really expect much of a refresh at all. Manufacturing efficiency, yes. Rearranging to make room for R2 production, yes. But I'm not expecting any meaningful change to the product at this point. Will be happy to be proven wrong.

Maybe they introduce a new, functional, charge pad or a drawer to replace the camp speaker as standard (with the speaker available for an upcharge).

 

[Epicloop]

they are overpriced compared to competitors and they are still at a negative contribution margin per vehicle. Shutting down the factory shows you how serious the situation is for them

The slight visual difference would provide some value for those people that buy the post-refresh model to “show” they have a newer one. But otherwise I don’t expect a higher quality vehicle when cost cutting is the primary objective.

If you have a voucher, my advice is use it on a quad with a better warranty. Lease it b/c the value will drop a ton over the next few years. Get the $7500 tax credit and enjoy the ride.

R1T- I believe only the Lightning is cheaper but not really that comparable target audience. The CT is more & the reviews are mixed.
The R1S doesn't really have much for comparison either, the comparable vehicles are all ICE.
Munro said they are underpriced for product delivered.
The entry level features may go down that does not mean quality follows.
I could see an Explore package, streamlining of battery packs with OTA option to upgrade.
They just need an overall streamlining of production.
Are the Quads still all Bosch? If they are they change to quad or tri-motor Enduro's with a hp/tq increase at a premium(Ascend).
At later time I see a R1S XL with 11 modules & 180kwh for both S &T.

 

[Glstr]

R1T- I believe only the Lightning is cheaper but not really that comparable target audience. The CT is more & the reviews are mixed.
The R1S doesn't really have much for comparison either, the comparable vehicles are all ICE.
Munro said they are underpriced for product delivered.
The entry level features may go down that does not mean quality follows.
I could see an Explore package, streamlining of battery packs with OTA option to upgrade.
They just need an overall streamlining of production.
Are the Quads still all Bosch? If they are they change to quad or tri-motor Enduro's with a hp/tq increase at a premium(Ascend).
At later time I see a R1S XL with 11 modules & 180kwh for both S &T.

I thought I just read that the Silverado EV pricing and trims were announced with lower pricing and with significantly longer range.

I also think Munro made his statement a while ago…and the landscape has changed. Fisker is all but knocked out, Lucid is on the ropes and Rivian has been beaten up badly by the macroeconomic environment. Clearly their demand is down since they have enough to get them through 3-4 weeks of manufacturing shut down. I really am pulling for Rivian and think they will pull through with their strong brand, community support and contract with Amazon. But I wouldn’t be surprised if Rivian becomes a division of Amazon at some point in the next year.

 

[Rividiculous]

Prediction:
- Pricing generally similar, a bit more of a spread
- new wheel options (including style shown on R2)
- slightly revised light bar
- slightly revised mirrors
- new steering wheel (okay, I’m dreaming a little)
- heat pump
- electrochromic roof available as part of extra pricey interior
- camp speaker improved but only included with pricier trim(s)
- weight loss of 100 lbs or more
- improved UX display graphics
- slightly better efficiency and range all around
- stereo changed. Some people insist it’s better, others will declare it totally sucks.
- other trim changes that will lead to heated arguments that are fun to follow.
- lower cost to build.

From this, Rivian makes a small gross profit on each car sold.

Existing R1s remain awesome, suffer nothing more than slight depreciation hit that occurs with any refresh of any car. Or maybe even benefit from expanding gear store items and fact that Rivian is in better financial shape. (Which would actually benefit resale value as Rivian becomes viewed as a less risky purchase.)

 

[Glstr]

Prediction:
- Pricing generally similar, a bit more of a spread
- new wheel options (including style shown on R2)
- slightly revised light bar
- slightly revised mirrors
- new steering wheel (okay, I’m dreaming a little)
- heat pump
- electrochromic roof available as part of extra pricey interior
- camp speaker improved but only included with pricier trim(s)
- weight loss of 100 lbs or more
- improved UX display graphics
- slightly better efficiency and range all around
- stereo changed. Some people insist it’s better, others will declare it totally sucks.
- other trim changes that will lead to heated arguments that are fun to follow.
- lower cost to build.

From this, Rivian makes a small gross profit on each car sold.

Existing R1s remain awesome, suffer nothing more than slight depreciation hit that occurs with any refresh of any car. Or maybe even benefit from expanding gear store items and fact that Rivian is in better financial shape. (Which would actually benefit resale value as Rivian becomes viewed as a less risky purchase.)

Agree on the wheel options. I think they’ll get rid of the 21” wheel and use the 20” wheel and have an AT and AS options offered. The 21” is a problem for them.

 

[edman007]

My prediction

- New cameras
- Bosch gone, now have dual, tri, and quad configs
- Quad and tri get a new rear clutch that auto enables the way dual does
- Quad and tri now match dual range
- options are better bundled to trims
- Camp speaker is an option, ships with a lockable box instead
- working charge pad with usb-c ports on it
- battery improvements, charges a little faster, possibly a slightly higher pack voltage
- New color to replace compass yellow

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