How is Rivian going to make up the loss?

[Taycanfrank]

Something I wonder is if Rivian thought they needed a 20% increase to stay profitable, and they're probably 2? years away from making it out of pre-orders (assuming most uncancel), how are they going to make up the projected loss?

You can also factor in the short term damage they caused with this debacle.

Are we going to see corners cut? Are they going to start dropping features, events, etc.. and adding less new features?

If they felt they could absorb the loss I don't see why they would have made the decision in the first place. So how are they going to find ways to make up the difference?

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[KurtP]

Increase the price on commercial vans or future builds.

 

[Jagger027]

Request all big supporters/defenders of price hike to cancel their current pre-orders and place a new order to support Rivian during these stressful and troubling time of inflation

just for giggles... Nothing personal and please don't get all fussy about it...

 

[sevengroove]

Sell "I survived the price hike debacle" t-shirts for $100 each.

 

[Forager]

They’ve not quoted any pricing for RAN charging, their Rivian club, service fees, extended warranty —so those can all increase without anyone knowing.

I expected them to raise their interest rates in step with the FED, expect them now to be a bit more aggressive.

Parts replacements will always increase with inflation and supply costs, so they’ll recapture a bit more there.

Any new features/options they release will based on new pricing, so perhaps they focus on bringing these to market earlier to upsell early buyers.

Maybe the latte at the service center won’t be free.

Theres lots of little ways to chip away at this and we don’t even know everything about their business model.

 

[Longhorngirl]

I may not have the numbers exactly correct, but Rivian got an extra $3 billion from the IPO. The original price was $58 and that increased to $78. One of the reasons I assume they were about to get more was due to the large number of preorders. They should be able to absorb the loss. Of course, it would have been better to use this money towards other things, especially since they are hemorrhaging money.

 

[E.S.]

Not sure they are hemorrhaging $$. They're working on building a 2nd plant, securing the land and permits for that land, hiring the proper number of personelle for that plant, and adding the costs for the supplies for this plant. That's not exactly inexpensive. That's not saying Rivian will go broke, but a burning hole in their pocket they do no have.

Btw, despite today's event, there will still be plenty of buyers in the future which (unfortunately) will be subjected to the newer price point. One of the disadvantages of me not being an early adopter and waiting till they get the production act together is knowing I will subjected to these price hikes.

 

[AdamsFan1983]

There’s nothing stopping them from another stock offering other than low share prices.

I fully expect that to happen eventually

 

[sub]

They could prioritize production of same price but cheaper to make lower range/dual motor variant until production becomes sufficiently efficient to sell the long range quad motor profitably.

I hope they don't do this, but it is a way they could avoid selling vehicles at a loss.

 

[SANZC02]

It is probably not as bad as one would think, average adjustment was probably 15k, if half was to cover cost and the other half for margin assuming preholders jumped to 85k then the hit would be ~620 million if every preorder converted. Some of it they will eat, some will be recovered in manufacturing efficiencies as the build rate increases. They could recover some reworking some contracts as well for higher guaranteed order quantities Because the suppliers could also reduce some cost.

 

[Speedrye]

They make up the loss by being a good company and not screwing the customers. As happy customers, we return for more vehicles, we recommend friends to Rivian, etc. I don't see a practical way to make up those losses short-term.

Somebody failed at math and logic at Rivian and they're going to pay for it.

Now, if Rivian wants to offer me four of their new in-house 300hp motors as an upgrade to the smaller Bosch units, I'll happily throw some more money at them to help in their woes. Give me a non-glass roof option, I'll cough up more money.

 

[AdamsFan1983]

We’re being de-contented to one cup holder

 

[moosehead]

Keep their eye on the prize by executing.

Production, buildout of service & charge network.

 

[RWerksman]

We’re being de-contented to one cup holder

I'm not sure where this came from and at this point I'm too afraid to ask.

 

[lostpacket]

No more free-snacks-Fridays

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