R2 production costs less than half of R1 - here's how

[Electric Rivilution]

If you didn't catch this in the latest investor presentation, this infographic explains how the R2 production costs less than half of the R1.

Profitably Delivering R2 at an Accessible Price

R2 bill of materials expected to be approximately 50% of R1 and non-BOM costs expected to decline greater than 50% due to focus on design for manufacturing and fixed cost efficiencies¹

Key Design Changes & Sourcing Leverage

Structural cost reductions from design changes, sourcing leverage and manufacturing simplicity²

• Front Suspension
  • Strut architecture delivering over 70% savings vs. R1 double-wishbone
• Battery Pack
  • Floor to pack design; 4695 Structural Pack
• Front Windshield
  • ~50% savings predominantly from sourcing leverage
• Low Voltage Harnesses
  • 2.3 mile reduction in harness length and over 60% reduction in the number of in-line connectors
• Power Conversion
  • 5-to-1 module consolidation with integrated electronics; ~70% reduction in high-voltage cabling
• Corner Radar and Ultrasonic Sensors
  • Over 50% savings from removing the ultrasonic sensors and sourcing leverage on corner radars
• Maximus Drive Unit
  • ~30% piece cost savings; integrated side-mounted inverter
• Underbody Structure
  • Utilizing large high pressure die casting resulting in over 90% fewer parts and ~30% piece cost reduction
• Rear Doors
  • ~65% part count reduction and ~55% savings from design optimization

Fixed Costs

Depreciation and conversion costs absorbed over more units increasing profitability

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[NY_Rob]

^ Sandy Monroe will be able to sleep tonight!!

 

[captainjp]

I’m sure it still won’t be good enough for some people and the implication that Rivian and RJ should “try harder”

 

[Dave Cundiff]

I expect we'll buy an R2 -- provided we don't have to give an airline-style "how to get out in an emergency" talk to any rear seat passengers.

I don't care how much money they saved if it's not safe! All the other changes look safe enough, but I'm planning to evaluate the rear doors very carefully.

Best to all!

 

[SolidTHX1138]

So how much does it cost to make an R2? I see percentage in saving but I think margins would be more informative for me as an investor.

 

[SANZC02]

So how much does it cost to make an R2? I see percentage in saving but I think margins would be more informative for me as an investor.

They have said they are targeting 20%.

My guess is it will be less initially while they ramp up and are able tp spread the fixed costs across the higher volumes.

 

[SolidTHX1138]

They have said they are targeting 20%.

My guess is it will be less initially while they ramp up and are able tp spread the fixed costs across the higher volumes.

I was thinking minus the fixed cost. I just hate when some of the naysayers investment analyst say "Rivian is losing $xxK per car," without context. Its makes it sounds like Rivian has an unprofitable product when is just an unprofitable company.

 

[captainjp]

I was thinking minus the fixed cost. I just hate when some of the naysayers investment analyst say "Rivian is losing $xxK per car," without context. Its makes it sounds like Rivian has an unprofitable product when is just an unprofitable company.

Much like Lucid losing $300k per car produced

 

[RivAW]

At least as far as the consumer sees for the price of the vehicle; the R1 price has gone up substantially, which make the R2 price seem lower than it is.
Due to timing an available rebates, my Gen R1T quad cost barely more than the r2 launch …which I won’t buy because I’m waiting to consider the 3 motor variant (or R2x) if it makes it to production

 

[mkennedy009]

Di-cast, my match box cars were Di-cast. They are still alive and working today, 50 years of play.

 

[Zathras]

Whatever. Smart investors know to look beyond the next quarter.

 

[DaveA]

Let's hope the new suspension is 80% quieter than R1.

 

[macb00kemdanno]

I am looking forward to the less complex suspension. I had my mind set on a used Gen 2 R1T, but I’ve read too many stories about failed half shafts and other air suspension woes (which would be hell outside the warranty period). Fewer parts, less to break with the R2.

 

[Zathras]

As appealing as those features could be, I'm of the same mind. Simpler is better in some ways.

 

[iansriv]

As appealing as those features could be, I'm of the same mind. Simpler is better in some ways.

Agree. My biggest hesitation on buying the R1 was the air suspension. If the R2 was available in '23, I probably would have gone with that just for the simplicity.

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