New RJ interview on robotaxi, autonomy, personal vehicle ownership, cash burn rate, R2 (BuyHoldRant podcast)

[Katsudon]

"In a special episode of the Buy Hold Rant podcast, hosts Hamid Shojaee and Dustin Alper talk to Rivian Founder and CEO RJ Scaringe. As shareholders themselves, the guys have lots of questions for Scaringe, including how is Rivian ($RIVN) going to make up for burning nearly $25B in cash? Is the R2 the way to do it? Plus, Scaringe explains where he sees the car industry going, how EVs fit into that future, and how Rivian is going to get consumers on board."

0:00 Intro
0:45 4 major shifts in car industry
4:20 How does Rivian address those shifts?
7:40 Why is Rivian burning cash?
15:00 When will Rivian become profitable?
20:20 What do investors need to know?


Summary by @rivianupdates:

In case anyone needs more confirmation, a Rivian owned robotaxi fleet is likely not happening anytime soon.​

​

Rivian is focused on bringing autonomy to personally owned vehicles.​

​

RJ doesn’t believe the U.S. shifts from 95% of miles being driven in personally owned vehicles to mostly robotaxis. He expects rideshare market to grow but not replacement.​

​

- 3 car households become 2 due to higher utilization​

- Shared ownership models between friends/family​

- Personally owned vehicles could be used as robotaxis when not used​

​

But from Rivian's perspective car ownership isn’t going away. It just becomes more efficient and more flexible.​

​

That said, if Rivian successfully delivers true point to point driving and ultimately a Level 4 system, the technology stack would hypothetically allow them to enter a robotaxi model if they ever chose to.​

RJ addressing the “Rivian burned $25B” comments:

- 2018/2019 supplier contracts signed at peak auto demand​

- COVID and supply chain premiums as a new automaker​

- Competing with Tesla 2023, not Tesla 2013​

​

RJ also said Rivian could reach positive free cash flow with just Illinois if they slowed growth but the goal is millions of vehicles per year and that requires capex.​

​

Georgia, European expansion, and vertical integration require continued investment and infrastructure first which explains a large cash burn.​

​

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[MPH Charlotte]

Well done. Great interview. Thanks and fingers crossed for the R2.

 

[TexasBob]

Previous post https://www.rivianforums.com/forum/...rivians-rivn-rj-scaringe-buy-hold-rant.56376/

 

[savethemanual]

RJ pretty much confirmed R2 pricing will be in lockstep with the Model Y.

 

[Gen(R3)Xer]

RJ pretty much confirmed R2 pricing will be in lockstep with the Model Y.

Glad to hear it. I was predicted $55K to $60K for the launch model, leaning more toward $60K in recent weeks.

I’ve read several comments here suggesting that it would be around the same price as a Model Y Performance. I think the launch edition will go slightly higher at $59,990. Hopefully no more than that. The cheapest R2 RWD is also $5K more expensive than the cheapest Model Y. I don’t believe there will be a Long-Range RWD R2, at least not at first. That would deter people from buying the upper trims. I could see that middle trim R2 AWD costing between $53K and $55K.

I personally think there will only be three trims at first in order to simplify production. The Model Y did not have 5 trims at launch. The $45K R2 will have the smaller battery and less than 300 miles of range, while the other two trims will have the bigger battery and over 300 miles of range.

I go back and forth, but I could see Rivian going:

$45K Standard RWD
$55K Dual-Motor AWD
$65K Dual-Motor AWD Performance
(I don’t want the Launch to be this high, but $10K between trims seems reasonable.)

or

$45K Standard RWD
$53K Dual-Motor AWD
$60K Dual-Motor AWD Performance

This way more people could easily stretch to the most popular middle tier, especially with an enticing lease offer. I’d say this is the best case scenario.

All just speculation. The answers will arrive in 12 days!!!

 

[soysaucing]

Market share and brand awareness is more important right now than higher margin per vehicle. Once the general public knows rivian, the company will take off.

 

[skyguyscott]

- Personally owned vehicles could be used as robotaxis when not used​

I may be wrong, but I have a hard time seeing this model go anywhere.

If you bought a new vehicle, are you going to want to send it away to who knows who? What happens to the Insurance rates? Who's going to clean up after it drives some drunk home? What happens inside these robotaxis when young folks learn they can summon a private third place and finally be alone? Will the owner install cameras inside? Will they be allowed to? I see this going sideways in 127 different directions at high speed.

And if you are financially desperate and need to hire out your new car, how did you manage to afford to buy a new car, unless you factored in Uber-ing it? But then, why not just buy a used car for just yourself instead -- unless even then you still need to hire out your used car?

And if it turns out that mostly older, used vehicles populate the robotaxi fleet, how many people are going to want to ride in them? What demographic are going to be using them, and how profitable is that segment? Are privately-owned robotaxis going to be regulated, like tire condition, cleanliness, safety? Can riders hack it? Who is liable if they highjack it and kill someone in an accident? What happens if your car is used in a crime?

I just don't see how this model really works in a realistic market similar to our own, perhaps in some dystopian society? Can you help me out here? What am I missing?

 

[Budman]

I may be wrong, but I have a hard time seeing this model go anywhere.

If you bought a new vehicle, are you going to want to send it away to who knows who? What happens to the Insurance rates? Who's going to clean up after it drives some drunk home? What happens inside these robotaxis when young folks learn they can summon a private third place and finally be alone? Will the owner install cameras inside? Will they be allowed to? I see this going sideways in 127 different directions at high speed.

And if you are financially desperate and need to hire out your new car, how did you manage to afford to buy a new car, unless you factored in Uber-ing it? But then, why not just buy a used car for just yourself instead -- unless even then you still need to hire out your used car?

And if it turns out that mostly older, used vehicles populate the robotaxi fleet, how many people are going to want to ride in them? What demographic are going to be using them, and how profitable is that segment? Are privately-owned robotaxis going to be regulated, like tire condition, cleanliness, safety? Can riders hack it? Who is liable if they highjack it and kill someone in an accident? What happens if your car is used in a crime?

I just don't see how this model really works in a realistic market similar to our own, perhaps in some dystopian society? Can you help me out here? What am I missing?

Completely agree. There are so many issues, can’t see it happening.

Say someplace uses it, gets out but does not close the door. Then your vehicle is stranded. Just one of many things that could go wrong.

 

[captainjp]

Completely agree. There are so many issues, can’t see it happening.

Say someplace uses it, gets out but does not close the door. Then your vehicle is stranded. Just one of many things that could go wrong.

Yeah, I don’t think it will ever come to fruition. This was something that Elon pitched a few years ago.

 

[SDH]

I have a hard time beliving in the 'shared ownership between friends and family' too. I mean, you split the cost 50/50 then figure out the practicalities of usage afterwards? Nah.

Just buy a car that costs half the price and use it when you want.

 

[DuoRivian]

Glad to hear it. I was predicted $55K to $60K for the launch model, leaning more toward $60K in recent weeks.

I’ve read several comments here suggesting that it would be around the same price as a Model Y Performance. I think the launch edition will go slightly higher at $59,990. Hopefully no more than that. The cheapest R2 RWD is also $5K more expensive than the cheapest Model Y. I don’t believe there will be a Long-Range RWD R2, at least not at first. That would deter people from buying the upper trims. I could see that middle trim R2 AWD costing between $53K and $55K.

I personally think there will only be three trims at first in order to simplify production. The Model Y did not have 5 trims at launch. The $45K R2 will have the smaller battery and less than 300 miles of range, while the other two trims will have the bigger battery and over 300 miles of range.

I go back and forth, but I could see Rivian going:

$45K Standard RWD
$55K Dual-Motor AWD
$65K Dual-Motor AWD Performance
(I don’t want the Launch to be this high, but $10K between trims seems reasonable.)

or

$45K Standard RWD
$53K Dual-Motor AWD
$60K Dual-Motor AWD Performance

This way more people could easily stretch to the most popular middle tier, especially with an enticing lease offer. I’d say this is the best case scenario.

All just speculation. The answers will arrive in 12 days!!!

$65k for performance dual motor is ridiculous given the competition and the technical specs of the Rivian.

 

[Gen(R3)Xer]

I may be wrong, but I have a hard time seeing this model go anywhere.

If you bought a new vehicle, are you going to want to send it away to who knows who? What happens to the Insurance rates? Who's going to clean up after it drives some drunk home? What happens inside these robotaxis when young folks learn they can summon a private third place and finally be alone? Will the owner install cameras inside? Will they be allowed to? I see this going sideways in 127 different directions at high speed.

And if you are financially desperate and need to hire out your new car, how did you manage to afford to buy a new car, unless you factored in Uber-ing it? But then, why not just buy a used car for just yourself instead -- unless even then you still need to hire out your used car?

And if it turns out that mostly older, used vehicles populate the robotaxi fleet, how many people are going to want to ride in them? What demographic are going to be using them, and how profitable is that segment? Are privately-owned robotaxis going to be regulated, like tire condition, cleanliness, safety? Can riders hack it? Who is liable if they highjack it and kill someone in an accident? What happens if your car is used in a crime?

I just don't see how this model really works in a realistic market similar to our own, perhaps in some dystopian society? Can you help me out here? What am I missing?

Tesla promised this same feature and has yet to deliver. Everyone was going to make money as they slept while their autonomous vehicles were out ferrying drunk people around town all night. I guess Tesla forgot about this when they decided to start operating their own robotaxi fleet. You don’t want to compete with your own customers. Maybe that’s why they’re eliminating drivable vehicles?

Does the R1T, R1S, or R2 even have an interior camera?

 

[Gen(R3)Xer]

I

$65k for performance dual motor is ridiculous given the competition and the technical specs of the Rivian.

I said I didn’t want the launch model to be that high, but there has to be some kind of distance between the trims. There’s $7K difference between the R1S Dual Standard and the R1S Dual and $23K difference between the R1S Dual and the R1S Tri (minus options). The smaller difference between the lower and mid trims motivates people to upgrade, especially after they see the limited options of the lower trim. This is all done by design.

Most people will go for the middle, like they usually do. The price of that model will matter the most. I’m thinking $53K to $55K after the launch edition phase. This price has to offer the most value while still making Rivian a decent profit to continue to expand their operation.

 

[richguess]

I may be wrong, but I have a hard time seeing this model go anywhere.

If you bought a new vehicle, are you going to want to send it away to who knows who? What happens to the Insurance rates? Who's going to clean up after it drives some drunk home? What happens inside these robotaxis when young folks learn they can summon a private third place and finally be alone? Will the owner install cameras inside? Will they be allowed to? I see this going sideways in 127 different directions at high speed.

And if you are financially desperate and need to hire out your new car, how did you manage to afford to buy a new car, unless you factored in Uber-ing it? But then, why not just buy a used car for just yourself instead -- unless even then you still need to hire out your used car?

And if it turns out that mostly older, used vehicles populate the robotaxi fleet, how many people are going to want to ride in them? What demographic are going to be using them, and how profitable is that segment? Are privately-owned robotaxis going to be regulated, like tire condition, cleanliness, safety? Can riders hack it? Who is liable if they highjack it and kill someone in an accident? What happens if your car is used in a crime?

I just don't see how this model really works in a realistic market similar to our own, perhaps in some dystopian society? Can you help me out here? What am I missing?

Agree, but have you ever rented a car on Turo? That platform works well, my kids always use it in Kauai. They’re efficient and a bit better priced.

 

[DuoRivian]

I

I said I didn’t want the launch model to be that high, but there has to be some kind of distance between the trims. There’s $7K difference between the R1S Dual Standard and the R1S Dual and $23K difference between the R1S Dual and the R1S Tri (minus options). The smaller difference between the lower and mid trims motivates people to upgrade, especially after they see the limited options of the lower trim. This is all done by design.

Most people will go for the middle, like they usually do. The price of that model will matter the most. I’m thinking $53K to $55K after the launch edition phase. This price has to offer the most value while still making Rivian a decent profit to continue to expand their operation.

I wouldn’t necessarily use the R1 as a guide. Volvo are charging around $3k on their European configurators to go from P6 to P10 and you get a second motor providing over 130hp and 13kW of battery size increase. Therefore if the RWD is $45k then a dual motor should be available for under $50k. Of course depends on specs like Explore vs Adventure vs Ascent for example but doable.

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