VSG
Well-Known Member
What most people seem to be missing is that Rivian produces > 1000 vehicles per week now. This means there pretty much HAS to be >1000 vehicles on the "lot" in Normal on any given day, even in a best-case scenario. A conventional manufacturer will just immediately ship these to dealers, where they will be "invisible" because each of the thousands of dealers will only have a few cars on the lot. But with a direct-to-consumer model, where it takes ~1 month from VIN assignment until delivery, you are ALWAYS going to have a few weeks of production output sitting at the factory. That's not something to be worried about - that's just math (well, unless you are worried about math, which is an entirely separate topic ...).
Regardless, Rivian will be shutting down the factory for 4 weeks, starting a week from tomorrow. That means they will need about 4k-5k vehicles on the lot to tide them over for the month.
So this shutdown is accomplishing AT LEAST five major things that all BENEFIT Rivian:
The only downside I see is that it will delay the fulfillment of some orders where the customer is not flexible on configuration. I can live with that, because it will demonstrate there still is hard demand for the product if people will queue up for it.
I'm still very bullish on Rivian. If you want to see headed for failure look at Fisker. Rivian is NOTHING like Fisker. Rivian has produced almost 100k vehicles in the past few years. Other car makers who went bankrupt haven't even approached this number.
Regardless, Rivian will be shutting down the factory for 4 weeks, starting a week from tomorrow. That means they will need about 4k-5k vehicles on the lot to tide them over for the month.
So this shutdown is accomplishing AT LEAST five major things that all BENEFIT Rivian:
- Overhaul of lines to implement a 30% cost reduction. Huge win!
- Clearing out of all pre-price-hike orders, which are currently sold at a loss. Vehicles produced after the reconfiguration will all be sold at a gross profit. Huge win!
- Reduce/eliminate stock of undelivered vehicles, which Wall Street has always complained about. Huge win!
- Implement steps towards R2 production. While I don't know exactly what this involves, there will certainly be some amount of new parts that will be re-used in the R2, and there will certainly be some amount of assembly line re-configuration to accommodate R2 assembly. R2 is going to be a bootstrap operation, so Rivian will be gradually making changes to the factory and R1 in preparation for full-scale R2 production ~2 years from now. Win!
- We know there are some vehicles that are mostly finished and waiting for a few missing parts from the supplier switch-over (predicated on cost savings and securing R2 supply chains). This gives Rivian time to finish those off and sell them. Win!
The only downside I see is that it will delay the fulfillment of some orders where the customer is not flexible on configuration. I can live with that, because it will demonstrate there still is hard demand for the product if people will queue up for it.
I'm still very bullish on Rivian. If you want to see headed for failure look at Fisker. Rivian is NOTHING like Fisker. Rivian has produced almost 100k vehicles in the past few years. Other car makers who went bankrupt haven't even approached this number.
Sponsored
