Is this stock doomed?

[R1TS]

Let's look at the doomsday topics in the press related to EVs
- GM cancelling their stated goals of 100k more BEVs this year and 400k next year. (makes sense with the strikes and delay of product launches for BEVs that people want)
- Ford pushing out their 12B investment in EVs, citing low demand, Mach E are sitting on lots. (dealer markup ring a bell? I remember calling on a Mach E, markup, bought a Tesla.)
- Honda cancelled relationship with GM to build a low cost EV. (likely based on GM)
- Toyota feeling good about this news since they are way behind as it is. (feeling good but losing market share to the likes of Tesla?)

All of this is good news for Rivian - even though the stock is down today. Gives them more time to build out and ramp up, gain market share, improve their products. Even the CT launch makes the R1T value look pretty dang good in comparison.

I wouldn’t necessarily say the delays by legacy gives Rivian more time. Instead, it means Rivian has a chance to gain additional market share early on.

The delays by legacy aren’t like 1-2 years delay. So, Rivian doesn’t have the luxury to just relax a little. They still need to stay on track to get the R2 in production by 2025 or 2026 without any delays. Even by then, these “delayed” legacy brands will have introduced a lot of competing products.

Bless everyone who bought this stock at IPO special pricing and even above $100.

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[Dustyshades]

Financing or paying cash, if we want to get technical and get on our frugal high horse; none of us (by rule of thumb) should be purchasing any vehicle in which price exceeds 35% of pre-retirement or post-retirement gross annual income. Meaning if you did not or do not make over 250-270k/yr you have indulged. Also meaning those who “technically” purchased w/o indulging would, in most cases, not qualify for EV tax credits either.

Just pointing out that the income limit if you’re married and filing jointly is $300k

 

[Nsblifer]

Just pointing out that the income limit if you’re married and filing jointly is $300k

Thereby adding additional layers of complexity having to clear purchase with said wife.

 

[RivianPioneer]

Nope, Tesla won't survive either.

That’s a bet I wouldn’t make. Tesla will sooner be around than GM in a few years. I also believe Rivian will find its footing in another 24 months. People were saying that Tesla was doomed 7 years ago when I got my first Tesla. I was constantly told that they would be out of business in a year or so. I know a lot of people hate the company for various reasons, just like there are Rivian haters, but I expect they will all be proven wrong in the end. That’s my bet, and I placed it by purchasing vehicles from both companies, and my experience driving both vehicles (along with tons of cars from the big ICE vehicle manufacturers) leads me to believe Tesla and Rivian have a better chance of surviving than these big, inflexible, and lethargic ICE manufacturers who suffer from both a severe lack of vision and a fear of change.

 

[Hillbilly]

Bought my first EV in 2016, was waiting since then for an EV to replace my Jeep GC.

Picked up my R1S in Normal this past January, did a 5100 mile road trip on my way back to CA, do not see myself ever purchasing another ICE vehicle. Going to be taking another trip after the first of the year, probably be closer to 6500 miles this time and will be doing it in an EV.

I've done them and don't think I'll attempt again until we've got access to the Tesla network. Too much uncertainty with electrify America congestion, throttling, and general unavailability really made what should have been a couple of enjoyable trips super stressful.

 

[izgoy]

Just pointing out that the income limit if you’re married and filing jointly is $300k

AGI

 

[Biturbowned]

I’ve been buying more, keeping some sidelined for a pullback to 14, but I’m comfortable with my cost basis.

 

[White Shadow]

I think Tesla survives for sure, but all the smaller start-ups are going to have to be puchased (or merged) in order to survive. Yes, including Rivian. It's common knowledge that EV demand isn't what was projected, so don't look for stock prices to rise anytime soon.

 

[emoore]

I mean technically all stocks are doomed eventually. No company will last forever.

 

[Donald Stanfield]

I think Tesla survives for sure, but all the smaller start-ups are going to have to be puchased (or merged) in order to survive. Yes, including Rivian. It's common knowledge that EV demand isn't what was projected, so don't look for stock prices to rise anytime soon.

I disagree with Rivian needing to be merged. There is really nothing to indicate that at all. Rivian is executing really close to their plan.

 

[DuoRivians]

By 2030, per year:

400K R2 sold, each with $8k gross profit = $3.2B gross profit

100k R1 class sold, each with $10k gross profit = $1B gross profit

40k EDVs, each with $10k gross profit = $400M gross profit

~$4.6B gross profit

Let’s say 50% operating costs from gp

So, $2.3-2.5B ebitda

Apply high growth PE multiple of 40-60.

Around 2030: Company valuation of $90-150B

What is the company worth today? IMO, investors would be rewarded well at 5x their investment in 6 years for this sort of risk.

So, I think the company should be worth around $25B today, or about $26/share

 

[jjswan33]

That’s a bet I wouldn’t make. Tesla will sooner be around than GM in a few years. I also believe Rivian will find its footing in another 24 months. People were saying that Tesla was doomed 7 years ago when I got my first Tesla. I was constantly told that they would be out of business in a year or so. I know a lot of people hate the company for various reasons, just like there are Rivian haters, but I expect they will all be proven wrong in the end. That’s my bet, and I placed it by purchasing vehicles from both companies, and my experience driving both vehicles (along with tons of cars from the big ICE vehicle manufacturers) leads me to believe Tesla and Rivian have a better chance of surviving than these big, inflexible, and lethargic ICE manufacturers who suffer from both a severe lack of vision and a fear of change.

 

[DuoRivians]

Many wildly optimistic assumptions in here but pegging bubble P/E ratios for a car company 7 years into the future is probably the most egregious.

This is standard financial modeling. 20% gross profit margins is what Rivian forecasts. 40-60 PE isn’t a bubble. Tsla at 200 is a bubble.

Edit: the average analyst PT right now is $28.05. So, my back of envelope calculations aren’t “wildly” optimistic

 

[RivianPioneer]

 

[DuoRivians]

Ah, YES.....the same analysts who tried to justify a $78 IPO price with financial models written on toilet paper.

Valuing a car company at a 60 P/E is, historically, wildly optimistic. Tesla's current valuation is wildly optimistic. I'm consistent in making the point that it is foolish to apply Tesla style numbers (currently in a deflating bubble) to other car/ev companies.

So, agree to disagree. No one trying to convince you differently. And in this case, there’s a very easy way to bet on your convictions, ie the markets

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