Ford "PRICE WAR" drives RIVN under $10

[1T2022]

I bought more RIVN and averaged down to $11 flat.

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[EVsinROC]

"RIVN stock slid 6.7% through noon ET on Thursday -- but not because of any mistake that Rivian made.

This time, the blame belongs to Ford Motor Company (NYSE: F), which just declared a price war in electric trucks, and turned Rivian stock into roadkill in the process.

Have you driven a Ford lately? (Because it's cheaper than it used to be)
Any day now, Ford archrival General Motors (NYSE: GM) will begin selling its new Silverado EV electric pickup truck in competition with Ford's F-150 Lightning. Ford saw its automotive rival inching closer in the rearview, however, and is gunning the motor to stay ahead -- lowering the price of some F-150 Lightning models by as much as $5,500, as CarsDirect.com reported this week.

It's not entirely clear whether this move will be enough to maintain Ford's lead over Chevy. Notably, the lowest-trim "Pro" F-150 Lightning still costs a pricey $54,995, and the most expensive "Platinum" Lightning still costs a nosebleed $84,995. (Price cuts are all on the mid-tier vehicles). What is clear is that Ford's pre-emptive strike at Chevy, and the price war it foreshadows, seems to be spooking investors in Rivian."

They need to stop losing $33K/vehicle sold or else will run out if $ or RJ gets ANOTHER capital raise, which will FURTHER DILUTE existing shareholder value. Company may survive, but existing SH hurt again

 

[R1TS]

Enduro Motor. A startup developing and building an EV motor in house with full vertical integration is a core competency.

That vertical integration isn’t helping them on the service side. They are so backed up here on the West coast (and the East from what I read occasionally). And, they’re not quite fully vertical yet as they aren’t making their own batteries, which is arguably the most important aspect of EV manufacturing. That’s where the big cost advantage comes from. And, why BYD and Tesla can sell cars cheaply.

 

[sphereobject]

They need to stop losing $33K/vehicle sold or else will run out if $ or RJ gets ANOTHER capital raise, which will FURTHER DILUTE existing shareholder value. Company may survive, but existing SH hurt again

There has never been so much writing on the wall. I have no idea what RIVN is doing, delaying the next capital raise. Things are not going to get better. It needs to raise capital now - that is, unless RIVN is already in takeover talks to be acquired by another automaker (this is the only reasonable explanation as to why capital has not been raised yet). A capital raise now probably knocks the stock down to $4 per share. Maybe an acquisition could get done at $5 per share.

 

[1T2022]

above is troll for sure

 

[Dark-Fx]

They need to stop losing $33K/vehicle sold

Boy it's a good thing they have the plant down to retool the line to introduce all of their upcoming cost savings measures then. I can't wait to read what goalpost all the anti-RIVN people here will have to find next year.

 

[pricedm]

I think the market really misunderstands Rivian's products if it thinks there is significant cross-shopping of F150 and R1.

I agree.

But.... Ford Lightning XLT 320 mile range with road tires is currently $67k minus $7,500 Ford discount. As a long-time Rivian lookie-lou (I missed the pre-price hike reservation by 10 days) the $59,500 price of the Ford versus $80k for similar R1T is going to hurt Rivian sales. The $20k price difference will unfortunately sway some buyers from Rivian to Ford.

 

[pricedm]

I swore Ford was supposed to be announcing their Project T3 this year at some point, the ground up EV replacement for the Lightning.

Ford recently announced a delay to 2026 for the Lightning replacement.

 

[sphereobject]

above is troll for sure

Not trolling - this is just truth. RJ was asked about whether RIVN had enough capital to produce the R2, and the probably-honest answer from RJ was "We're very confident in the capital we have supporting operations through the end of 2025." (https://www.businessinsider.com/rivian-ceo-seemed-evasive-whether-enough-cash-for-r2-cnbc-2024-2).

It is unlikely the R2 gets produced and sold at any volume until late 2026 at best. The R2 will not be profitable on a per unit basis until hundreds of thousands are sold per year (this was the point of the now-delayed Georgia plant, produce the R2 at profitable scale). It is unlikely that the R2 can be produced at profitable scale at Normal. Even if they somehow managed to produce 200,000 R2s at Normal, and if they managed to squeeze out $15k of gross profit on a COGS basis per R2, that is only $3 billion per year - recall, Rivian has burned $12+ billion in capital the last 2 years alone.

It appears the R1 line will never be profitable. Even if they slash costs by 20% during retooling (not realistic), they are going to have to slash the prices of the R1T/R1S because demand is just not there. I wish it was, but it is not there at the current prices.

What that means - straight from RJs mouth - is that the company will either have to raise capital at some point between now and the end of 2025, or the company will need to be acquired. What part of what RJ said do you not believe? And if you have to raise capital, do you wait another 18 months until you are the steps of the bankruptcy courthouse, or do raise capital now, while you can? What do you think?

No company will acquire RIVN, which is a cash furnace, unless that acquisition is at a discount (and this would be a bailout gift to shareholders). Any capital raise will dilute existing shareholders by around 50%, and it will have to be a massive combined equity and debt raise (probably $5 billion equity and $2.5 billion debt revolver).

So if you are management, which path do you chose:

(1) Do nothing = bankruptcy
(2) Raise capital = 50% dilution of existing shareholders
(3) Pray for acquisition = what share price, $5 per share?

One of the above has to be selected by management. There are no alternatives. You could say, "raise less capital for less dilution," but that just delays bankruptcy, because you won't have enough capital to cultivate a profitable business. I am not saying these are not tough choices, but these are the choices.

What is trolling about this?

I have bought (cash) 2 R1S, and I own one now. I hope Rivian survives because I think the product is awesome and I want the company to honor the 5 year warranty on my 2024 R1S. I could have leased the R1S to throw default risk at someone else, but I rolled the dice on the bet that the company somehow survives.

Talking about objective metrics and reality is not trolling.

 

[pricedm]

Make a simplified R1T and sell for a lower cost and demand will go up.

Agree. If the R1T was under $80k with 20 inch rims, I, and many other prospective buyers, would have purchased a R1 long ago.

These need to be under $80k. If Lucid and Tesla and Ford are dropping prices and seeing sales increase dramatically, Rivian needs to do the same. $RIVN would benefit.

 

[AlanP]

Love the car. Hate the business model. Still trying to catch that falling sword. Keep getting blood on my hands. Lest we not forget the stock is down over 94 percent from peak. Why do some try to ignore the facts. Ask me how my Fisker investment turned out.

 

[LetsgoRIVN]

It’s capitulation! I just hope that Amazon is not selling.

 

[R1TS]

It’s capitulation! I just hope that Amazon is not selling.

If news comes out that Amazon starts liquidating their holdings, this thing is going to drop so hard. I really hope not. But, I also see them easily doing so. Businesses are less emotionally driven than us casuals at knowing when to just let it go (sorry, just came back from a Disney trip) and write things off.

 

[Tahoe Man]

There has never been so much writing on the wall. I have no idea what RIVN is doing, delaying the next capital raise. Things are not going to get better. It needs to raise capital now - that is, unless RIVN is already in takeover talks to be acquired by another automaker (this is the only reasonable explanation as to why capital has not been raised yet). A capital raise now probably knocks the stock down to $4 per share. Maybe an acquisition could get done at $5 per share.

Agree. I'm thinking there is backroom non public chatter of an acquisition thus the move lower on the equity side.

 

[LetsgoRIVN]

If news comes out that Amazon starts liquidating their holdings, this thing is going to drop so hard. I really hope not. But, I also see them easily doing so. Businesses are less emotionally driven than us casuals at knowing when to just let it go (sorry, just came back from a Disney trip) and write things off.

Now if Amazon is not selling, shouldn’t $9 be perfect for them to load up and have more control ? They seem happy with the product so why not buy more. Now imagine a news comes out showing Amazon increased their holdings

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