25% Tariffs on All Imports - Effect on Rivian prices?

[Donald Stanfield]

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Since Rivian does not break out indirect and direct costs for R1 vehicles for their 10Q/K, perhaps you know some inside information to substantiate the cost structure.

It’s public knowledge that Rivian is gross margin positive on their R1’s. Rivian has announced this several times

I can only go by what is reported and to say " The way you're using the loss per vehicle metric is incorrect." implies you are an accounting expert, regardless of you thinking that the remark is flippant or not.

When you’re wrong, you’re wrong regardless of my qualifications and I suggest keeping your replies to the topic at hand in the future.

So in regards to the tariff, if the battery cells are hit with 25% import duty - single most expensive components, as a whole, on the vehicle - then Rivian has to react. How they blend the cost increase is up to them, as I've mention as an example of bundling with more profitable options and make them the base inclusion, as they raise the price points.

Since I do not write or speak in absolute terms, all I would say is that based on FAS, and GAAP Rivian still is a non-profitable business without environmental credit, as of last quarter. This is a fact.

We all know this too thanks to Rivian’s financial statements. In fact, this is to be expected until R2. I don’t see what the point of mentioning this in a talk about tariffs and their impact on Rivian

Perhaps 1Q2025 will be better, although based on their commentary, there were a good amount of RCV pull forward by Amazon in 4Q2024 so they expect the deliveries to decline, which will hurt their top line.

Again, irrelevant because Rivian losing money is to be expected until R2 and Rivian has the cash to get their considering their declining cash burn rate. Getting net positive with their vehicle sales was a big first step. If other manufacturers are hit with the tariffs and Rivian isn’t hit as badly it could help Rivian’s bottom line.

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[BigSkies]

This is all great discussion on cost accounting, but I think the largest tariff impacts to Rivian will be indirect. The top questions and thoughts on my mind:

1. The entire North America auto supply chain is about to be raped, with OEM's possibly needing to bail out their suppliers. Will Rivian have parts shortages similar to during the pandemic when suppliers start going tits up?

2. Entire car nameplates, and possibly brands will exit the US market. Some of these are cars that people cross-shop with Rivian's. Does this possibly create opportunities as competitors leave the market?

3. Absolute prices matter, but so do relative prices. While tariffs will increase the absolute price Rivian has to charge, will competitors be impacted more or less than Rivian? The net effect of this may be positive or negative for Rivian.

4. Assume Rivian's plan to export to the EU is dead once retaliatory tariffs are in place. That heavily cuts into the justification for the GA factory. Consequences are a few years out, but this should impact their planning for the scale of GA.

5. If the entire automotive market goes haywire (possible, but not guaranteed), it becomes much more likely that the DOE releases Rivian's loan without a fight.

 

[SASSquatch]

Legacy ICE isn't relevant to the tariff conversion as ICE vehicles aren't exempted from the tariffs. If tariffs push the prices up of foreign vehicles but NOT Rivian's, then these competitors will be thrust into the price point Rivian is occupying, and they suffer in comparison if we are talking dollar for dollar.

They aren't exempted but Legacy ICE OEMs have large stockpiles of profit they are sitting on from those ICE vehicles that they can fall back on and they aren't losing billions per quarter like Rivian.

• Toyota Cash on Hand as of December 2024 : $88.41 Billion USD
• Cash and Cash Equivalents:
  Rivian ended the year with $7.7 billion in cash and cash equivalents.

 

[Donald Stanfield]

They aren't exempted but Legacy ICE OEMs have large stockpiles of profit they are sitting on from those ICE vehicles that they can fall back on and they aren't losing billions per quarter like Rivian.

• Toyota Cash on Hand as of December 2024 : $88.41 Billion USD
• Cash and Cash Equivalents:
  Rivian ended the year with $7.7 billion in cash and cash equivalents.

Toyota also has 200B in outstanding loans that Rivian does not have.

 

[andrewgrhogg]

Let’s also remember that GM and VW have lost over $30 billion in one year. In the automotive industry when things go south they go south fast. $88 billion might sound like a lot but GM lost $70 billion in 2 years in 2007/2008.

 

[Electrified Outdoors]

'Look what you made me do': Tesla owners post videos of their trade-ins set to Taylor Swift

The article does have embedded videos (so you won’t waste time watching additional TikToks), and people are selecting Rivians for their trade up.

https://www.businessinsider.com/bye-tesla-tiktok-trend-videos-taylor-swift-song-2025-3?op=1

Yes, I have noticed this trend. I figure by June/July I will be able to get a legacy Model Y for next to nothing.

 

[Rade]

I do not believe much of Rivian is foreign made - the tariff impacts should be negligible. I look at manufactures like GM where their small/mid-range SUV's are made in China and/or heavily reliant on components from China. They are going to get hit hard.

But just spitballing here... if we place an order for an R1S, say, today, would it not be hit by any tariff increase?

 

[andrewgrhogg]

Yes, I have noticed this trend. I figure by June/July I will be able to get a legacy Model Y for next to nothing.

True. But you will be buying a car with HW3 that Musk has already said won’t actually be capable of self driving (even tho he said it would be) and will have to be upgraded. But upgrading it is close to impossible.

You will also be buying a vehicle whose sister (Model 3) the Germany TUV system just reported failed TUV at unprecedented rates. A 14% rate vs an average of 5%!

if you don’t care about self driving and increased costs for lighting, suspension and brakes then go crazy. If you do then you might want to look elsewhere.

 

[SASSquatch]

Toyota also has 200B in outstanding loans that Rivian does not have.

They are in much better shape than Rivian despite those loans. Are you going to argue that? They and other ICE OEMs have massive amounts of collateral that Rivian doesn't that allow them to get notes at very low rates. They also have the ability through volume contracts with suppliers to reduce costs in ways Rivian doesn't.

OEMs usually carry a lot of debt in various forms but the cash on hand is what helps them get through challenging times. Rivian has little to no margin for error - and that was before the threat of tariffs.

In the short-term, ICE OEMS are seeing a surge in sales because people are running out to buy vehicles before tariffs go into place. I don't think that is happening for any of the EV divisions. Maybe Hyundai.

Rivian needs to worry about Hyundai.

 

[meshugy]

I do not believe much of Rivian is foreign made - the tariff impacts should be negligible. I look at manufactures like GM where their small/mid-range SUV's are made in China and/or heavily reliant on components from China. They are going to get hit hard.

But just spitballing here... if we place an order for an R1S, say, today, would it not be hit by any tariff increase?

The supply chain for Rivian is throughly international. Just take a look in your wheel well, on the suspension alone you’ll see “Made in Mexico,“ “Made in United Kingdom,” “Made in Poland,” and “Made in China.”

 

[SANZC02]

Most cars are very much made globally. People are saying Tesla will not be hurt much but there reported percent made in US includes the stuff made in Canada. I think everyone will be hurt but maybe Tesla and Rivian later as the parts import tariff is supposed to be delayed until they can define the scope.

Vehicle	Pct in US/Canada
Model 3 LR AWD/RWD	75%
Model 3 Performance	70%
Model Y (All Variants)	70%
Cybertruck	65%
Model S	65%
Model X	60%

 

[Electrified Outdoors]

True. But you will be buying a car with HW3 that Musk has already said won’t actually be capable of self driving (even tho he said it would be) and will have to be upgraded. But upgrading it is close to impossible.

You will also be buying a vehicle whose sister (Model 3) the Germany TUV system just reported failed TUV at unprecedented rates. A 14% rate vs an average of 5%!

if you don’t care about self driving and increased costs for lighting, suspension and brakes then go crazy. If you do then you might want to look elsewhere.

I’m looking for one notch above a beater. If I can get a Model Y for <20k with low mileage I’m happy with that as a beater car.

As you say the tech will not be the latest but in all honesty I feel confident enough to say we will not see anything close to level 5 in the next five years. Current functionality on HW3 is more than acceptable for now.

I get why folks don’t want to own them too….but it’s a decent car and hard to not jump if the prices come down that much.

 

[andrewgrhogg]

Agree - it’s actually a great car. My new Rivian for $100k is a relative piece of shit that I am rapidly losing patience with. In 4 years of Y ($60k) and 3 ($40k) ownership I had virtually zero problems, and when I did service was fast and efficient. My Rivian’s AC blew a leak within 10 minutes of ownership, took a week to fix with limited communication, and now 2 weeks in there is no AC and no heat. And my service appnt is in June!! I will be calling tomorrow to get that appnt moved up to within a week (the car is unusable) and if it fails again I will be initiating a lemon law case and then telling everyone I know to stay well away from Rivian. Sound harsh? No - it’s not. It’s a $100k car!! Everything should work and when it doesnt they should be picking it up from my house the next day and fixing it within a week.

I just blew two tires and two wheels on my 2001 M5 while driving through Bakersfield this past Sunday. I had the car towed to the bmw dealership there on Monday am after the tow company kept the car overnight. I did not pay bmw for that car. That dealership made no money from that car. I did not call for an appointment. On that same day they took the car in, got it on a lift, inspected it for damage, reported back, and started looking for two new wheels and by the following morning had a quote worked up. All communication over text. All questions answered promptly. Contrast that with my experience at Rivian - a company that now has $100k of my money. It’s a shit show of mediocrity at Rivian and it will cause them to fail as a car company. Their CEO is ponsing around at car shows when he should be visiting service centers and kicking some ass.

Love the car but it was obviously built by idiots, on a Monday, after a weekend of heavy drinking.

 

[André]

Very informative from WSJ

 

[Nixapatfan]

I do not believe much of Rivian is foreign made - the tariff impacts should be negligible. I look at manufactures like GM where their small/mid-range SUV's are made in China and/or heavily reliant on components from China. They are going to get hit hard.

But just spitballing here... if we place an order for an R1S, say, today, would it not be hit by any tariff increase?

You haven't looked very hard on the Rivian then, there are so many parts labeled as foreign made. The only things that seems to be made in the US are the steel components like frame and suspension lines, most everything else has a foreign label.

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