Is there really no way R2 can be produced earlier in Normal?

[VSG]

I would share your optimism for the GA plant if Rivian have had already broken ground and starting going vertical. Recent flyovers from mid Feb suggest they’re still working on grading.

The grading for the buildings was completed in December. The contractor was announced in December, the groundbreaking for the buildings is estimated to be in the next month or so. The contractor has extensive local experience building these sorts of buildings.

I'm not sure what the current dirt work is for - to me it looked like stormwater retention ponds, plus some off-site highway work which the state is doing.

Sigh:

“The Illinois plant currently has an annual capacity of 150,000 vehicles and Rivian has said it intends to increase that to 200,000 by 2023 as it adds new vehicles [my emphasis: like the R2!].”

I'm not sure why this is a response to what I said? The article you quoted is about 2.5 years old, from before the first R1 was even shipped. Yes, Rivian was planning on expanding Normal to 200k, but they stopped talking about that a year ago. My guess is that the expansion of the building (which they already did) was used for the Enduro manufacturing, rather than additional vehicle assembly. Regardless, current capacity at Normal is 65k R1 and 85k RCV (= 150k total). The re-configuring of the Normal plant this year is meant to change that to 85k R1 and 65k RCV, among other goals. The Georgia plant is being built with an initial capacity of 200k and an eventual upgrade to 400k.

Rivian has to finalize the design (assuming that they have for practical purposes), they need to order and get the robots. Probably 10~12 months. So that puts in mid 2025 at the earliest.

I believe they have already placed orders for manufacturing equipment that has long lead times. At least that's what I've been reading for at least six months in their official statements. That doesn't mean the lead times won't slip, but it does mean they are aware of this (and why wouldn't they be?) and that their estimates for shipping the R2 have taken this into account. Really, why would you assume that the people working full time to build a multi-billion dollar plant don't understand lead times and are going to be caught flat-footed when the building is finished and they find they can't buy a robot off-the-shelf for immediate delivery?

The R2 is currently much closer to a finished product than the R1 was back in 2018. I have to assume they have collectively learned a lot from the R1 about the steps necessary to get from a design to a finished product, and have learned a lot about how to manufacture their vehicles. So I have to assume that any timelines they are using for the R2 are more realistic than what they were hoping for with the R1. And I'm going to assume that another global pandemic isn't going to happen in the middle of the R2 process. So yeah, I think tooling up the assembly line in 2025 for first customer shipments in early 2026, which is what Rivian is saying, sounds reasonable at this point in time two years out.

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[edman007]

I don't think the manufacturing robots is really the long pole, the lead times are crazy, but Rivian has known they need a new factory for a while, I bet they placed the order over a year ago. Tesla apparently placed the order for their robots before they even settled on a factory location for their factory. Hand building is an option, and it's likely what will happen for much of the early R2s.

What they really need are the presses and dies for the final stamped parts, and a concrete pad to put them on. They can likely get that done, and a mini line stood up before the GA factory is "complete", which makes sense, build a quarter of the GA facility, setup a mini line and start deliveries, then finish the building, setup a large line, deliver from them, then convert the mini line into a large line. Now you have one factory with two large lines.

 

[DuoRivians]

The grading for the buildings was completed in December. The contractor was announced in December, the groundbreaking for the buildings is estimated to be in the next month or so. The contractor has extensive local experience building these sorts of buildings.

I'm not sure what the current dirt work is for - to me it looked like stormwater retention ponds, plus some off-site highway work which the state is doing.


I'm not sure why this is a response to what I said? The article you quoted is about 2.5 years old, from before the first R1 was even shipped. Yes, Rivian was planning on expanding Normal to 200k, but they stopped talking about that a year ago. My guess is that the expansion of the building (which they already did) was used for the Enduro manufacturing, rather than additional vehicle assembly. Regardless, current capacity at Normal is 65k R1 and 85k RCV (= 150k total). The re-configuring of the Normal plant this year is meant to change that to 85k R1 and 65k RCV, among other goals. The Georgia plant is being built with an initial capacity of 200k and an eventual upgrade to 400k.


I believe they have already placed orders for manufacturing equipment that has long lead times. At least that's what I've been reading for at least six months in their official statements. That doesn't mean the lead times won't slip, but it does mean they are aware of this (and why wouldn't they be?) and that their estimates for shipping the R2 have taken this into account. Really, why would you assume that the people working full time to build a multi-billion dollar plant don't understand lead times and are going to be caught flat-footed when the building is finished and they find they can't buy a robot off-the-shelf for immediate delivery?

The R2 is currently much closer to a finished product than the R1 was back in 2018. I have to assume they have collectively learned a lot from the R1 about the steps necessary to get from a design to a finished product, and have learned a lot about how to manufacture their vehicles. So I have to assume that any timelines they are using for the R2 are more realistic than what they were hoping for with the R1. And I'm going to assume that another global pandemic isn't going to happen in the middle of the R2 process. So yeah, I think tooling up the assembly line in 2025 for first customer shipments in early 2026, which is what Rivian is saying, sounds reasonable at this point in time two years out.

I bring up that article because Rivian is currently in a very risky situation. That is, their ability to raise cash from either debt or equity markets seem quite limited at less than $10B market cap.

I think they’ll need another $5B before end of 2025. If the R2 doesn’t ship until 2026, the share price may stay here until then.

Any hope of Normal production of R2 could raise the share price back up, whereby Rivian can raise more money easily

 

[HaveBlue]

Better off in a right to work state and get out of IL

 

[Zoidz]

The grading for the buildings was completed in December. The contractor was announced in December, the groundbreaking for the buildings is estimated to be in the next month or so. The contractor has extensive local experience building these sorts of buildings.

I'm not sure what the current dirt work is for - to me it looked like stormwater retention ponds, plus some off-site highway work which the state is doing.

Looking at the proposed site plan, it looks like the retention ponds are mostly completed. Using the long, thin pond in the video and upper right of the image below as a reference, it seems the active earthwork in the video is a "cut and fill" operation - excavating in the general area of the Adventure Trail and Test Track and moving it north of the Outbound Vehicle parking area, near that retention pond.

The large flat expanses (some areas with serious ponding from rain) are where the buildings will be located. It looks like rough grade is established, but no interior roadways for construction of the buildings have been established, and no evidence of any footers, underslab utilities, etc. anywhere in the building area. I just can't imagine anything under roof until May or June at the very earliest, even with aggressive work.

 

[VSG]

Looking at the proposed site plan, it looks like the retention ponds are mostly completed. Using the long, thin pond in the video and upper right of the image below as a reference, it seems the active earthwork in the video is a "cut and fill" operation - excavating in the general area of the Adventure Trail and Test Track and moving it north of the Outbound Vehicle parking area, near that retention pond.

The large flat expanses (some areas with serious ponding from rain) are where the buildings will be located. It looks like rough grade is established, but no interior roadways for construction of the buildings have been established, and no evidence of any footers, underslab utilities, etc. anywhere in the building area.

My statement about grading being completed in December was from Rivian's own statements and statements from the development authority back then. I don't know exactly what they mean by completed, but I assume it means that the locations where the buildings are to be sited have been brought to a condition where they are ready for vertical construction. I'm not assuming that means anything about the preparation of the rest of the site. My remark about how it looks to me like they are building things like retention ponds was made because they were clearly piling up dirt and scooping out dirt, not just leveling.

I think your analysis is reasonable. Thanks for those images - that helps a lot in understanding what is going on.

I didn't imply and didn't expect to see evidence of foundations work yet, because I expect that to start only after the official groundbreaking - I expect Rivian to publicize that phase of the construction as much as possible, because it marks a milestone. I also expect this to come shortly after the R2 reveal - not AT the reveal, because I think they could use two separate days of good news, not just one.

I just can't imagine anything under roof until May or June at the very earliest, even with aggressive work.

You mean May or June 2024? No, I think that is to early. But it wouldn't surprise me if the exterior of a few buildings were finished by the fall, and it wouldn't surprise me if there were at least foundations by June. I expect the most important building to be done first - things like the test track are IMO pretty low priority that they can work on while they have equipment on-site but after they have prepared the building sites.

Regardless, it's still rainy season in Georgia. Bad for concrete work, for one. By April I would expect an official groundbreaking, perhaps a bunch of gravel laid down for constructions lots, start of foundation work, and other things that can be done in parallel with the building construction. I don't know if the electric infrastructure is in place yet, for example, or what the power company's schedule is for that. The buildings are probably not the thing with the longest lead time ...

 

[rmalzo]

I think if Rivian figured out a way to produce R2 vehicles in Normal in 2025, it would change the whole doom/gloom narrative on a dime.

I’m definitely not an expert here. If anyone has a more informed opinion, is there really no way Rivian can produce R2 vehicles in Normal next year? I think even 20-30K would be a fantastic story.

They simply don’t have the money and without out it they are doomed. Sad to say but it is true. They will become a candidate for an acquisition. I hope!!

 

[Dark-Fx]

The more I think about this, the more this feels like a "Why build one plant when you can build two for twice the price" kind of a question. Ultimately I wouldn't expect the extra capacity of two lines being needed, but the capacity in Normal is inadequate to bring R2 online long term.

 

[Chris TX]

R2 will need a completely different line for machine/tooling and assembly. The cost of expanding Normal just for a 3rd line would be very short-sighted, limiting future production of all three models. If any expansion happens in Normal, it should be for R1 and EDV. Considering the price point for R1, it's probably still going to be a low-ish production rate. EDV being opened up from an Amazon exclusive should increase those orders. The incentives being given in GA for the R2 factory are huge. Rivian has already tapped out the big incentives for Normal.

 

[rbrak29]

I would share your optimism for the GA plant if Rivian have had already broken ground and starting going vertical. Recent flyovers from mid Feb suggest they’re still working on grading.

What would be the repercussions if Rivian backed out?

 

[mkg3]

R2 will need a completely different line for machine/tooling and assembly. The cost of expanding Normal just for a 3rd line would be very short-sighted, limiting future production of all three models. If any expansion happens in Normal, it should be for R1 and EDV. Considering the price point for R1, it's probably still going to be a low-ish production rate. EDV being opened up from an Amazon exclusive should increase those orders. The incentives being given in GA for the R2 factory are huge. Rivian has already tapped out the big incentives for Normal.

Completely true statement...

The thing is, at the current pace, Rivian may never get to GA and R2 as its own company.

Rivian is bleeding money (losing $43k/vehicle now and every vehicle they ever made to date) and needs triage to stop the bleeding and small steps to get back on its feet in a healthy way. That's why many are questioning their strategy and looking for a viable alternative.

So, while the statements made are true, it may not be viable given their situation currently.

 

[Chris TX]

"losing $43k/vehicle" is a falsehood, plain and simple. That $43k is being dumped into building the GA plant and other innovations.

 

[Zoidz]

You mean May or June 2024? No, I think that is to early. But it wouldn't surprise me if the exterior of a few buildings were finished by the fall, and it wouldn't surprise me if there were at least foundations by June. I expect the most important building to be done first - things like the test track are IMO pretty low priority that they can work on while they have equipment on-site but after they have prepared the building sites.

Regardless, it's still rainy season in Georgia. Bad for concrete work, for one. By April I would expect an official groundbreaking, perhaps a bunch of gravel laid down for constructions lots, start of foundation work, and other things that can be done in parallel with the building construction. I don't know if the electric infrastructure is in place yet, for example, or what the power company's schedule is for that. The buildings are probably not the thing with the longest lead time ...

My May/June 24 under roof is possible with a very aggressive schedule and perfect weather/site conditions. I've seen it done. But that's not a usable, ready for equipment interior. That's literally under the roof with no utilities, slab, etc. I can't speak for the buildings Rivian is constructing, but many manufacturing facilities like this are designed so that the steel superstructure, walls and roof go up first, and then the interior work proceeds, including underslab utilities and slab pour. Getting it under roof allows the rest of the work to proceed regardless of weather, such as pouring slabs.

 

[mkg3]

"losing $43k/vehicle" is a falsehood, plain and simple. That $43k is being dumped into building the GA plant and other innovations.

Go read the financials. It's the factory utilization versus cost. In 4Q, Amazon only paid Rivian ~$100M for lower deliveries. In 3Q that number was ~$400M, so the loss per vehicle goes up.

Your assertion is baseless.

 

[LetsgoRIVN]

Do you guys think RJ and his team are considering it ? I hope they are having emergency meetings to figure things out instead of doing the 9-5 business as usual !

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