Jalopnik Post / Lucid

[IlliniRivian]

This "First Gear" post about Lucid and Rivian is the sort of thing that continues to make me worry about Rivian.

As great as the vehicles are I worry about profitability long term.

https://jalopnik.com/lucid-is-holding-off-the-price-hikes-for-now-1848671470

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[Inkedsphynx]

In another thread someone showed how Tesla prices have risen basically the same or more than the price hike Rivian tried if you look at the price of the Tesla's when the Rivian's were announced versus 3/1

So, Rivian's hike wasn't out of line with the industry. The issue was they did it all at once, and did it unexpectedly.

I'm not concerned about Rivian's profitability. There's too much money invested for them not to become profitable. I also don't care if they aren't profitable now so long as their growth rate is commensurate with their burn rate, and they have sufficient cash on hand for continued operations over the next 8+ quarters.

That is the case right now. Rivian is fine. Don't panic.

 

[Guy]

At least Rivian capped their losses by raising prices from March. Lucid will increase their prices and have learnt from Rivian in how not to do it. They can set the price for their new Gravity SUV correctly and the lead time between ordering and delivery won’t be three plus years so losses minimized.

 

[SeaGeo]

A data point I think people are ignoring are Ford and GM. I don't remember where, but I saw a list if the average price increase for manufacturers, and it was all over the board. Tesla had jumped a lot, as had several manufacturers. But both Ford and GM have had pretty minimal price increases. And Ford still seems content to sell the F150 at the cost quoted. They obviously have some great cost saving advantages with reusing much of the body, but it's still a data point.

 

[Inkedsphynx]

A data point I think people are ignoring are Ford and GM. I don't remember where, but I saw a list if the average price increase for manufacturers, and it was all over the board. Tesla had jumped a lot, as had several manufacturers. But both Ford and GM have had pretty minimal price increases. And Ford still seems content to sell the F150 at the cost quoted. They obviously have some great cost saving advantages with reusing much of the body, but it's still a data point.

The cost efficiencies of buying parts at scale, and the predictability for vendors dealing with large established manufacturers... these are massive advantages that even Tesla does not yet have.

 

[Davethadog]

Meh. Prices schmises. They're irrelevant right now. Want to worry about their long term viability? Worry about them scaling. Margin is a function of volume/rate and until they approach capacity they're just a massive money losing machine that makes allegedly excellent cars.

As long as their prices stay in line with materials and the value they add, I bet there will be a substantial demand for them.

 

[Lionel_Hutz]

FWIW, Jalopnik hasn't been a legitimate (or even remotely accurate) source of automotive journalism for quite a while now. They specialize in hot takes for page views, like here.

 

[Forager]

Ford has stated that it’s essentially making MSRP and dealer invoice the same price, at least on their EV segment. That would effectively let them mask cost increases on those models for the short term (notice the lack of discounts available).

+1 for the “not worried about immediate profitability” camp. Focus on growth

 

[White Shadow]

It took a really long time for Tesla to become profitable. Then again, Tesla pretty much defined the whole EV movement that is gaining traction today. The difference with Rivian is that they have to overcome the big established legacy car makers who are now entering the EV game. Even if they don't have experience building electric vehicles, they still have plenty of experience building vehicles. In my option, that's the biggest threat to Rivian.

This is the new Grand Cherokee plug-in hybrid. If Jeep decides to make a fully electric version of this vehicle, I'd completely forget about the Rivian R1S and get the Jeep in a heartbeat. That right there is the biggest challenge for Rivian--competing with the legacy automakers in the truck and SUV segment. When the legacy companies catch up, it's going to get really competitive. And that's good for all of us who do want to go electric.

 

[COdogman]

Agree that Rivian will be fine. Their mistake with the price increase was not that it happened (that would be good for profitability), rather HOW they did it. Had they been communicating better and incrementally raised prices I don’t think it would have caused such an uproar. Obviously the new pricing is in line with what the legacy brands are charging for similar configurations.

Rivian still does have an opportunity to make a name for themselves before GM/ Ford, etc release the vehicles that will actually be their competition. So they need to do everything they can to make great vehicles and deliver as many as possible as soon as possible. There is a market for what they are selling. They just can’t afford to make too many mistakes along the way - it’s so competitive.

 

[Ventura]

It took a really long time for Tesla to become profitable. Then again, Tesla pretty much defined the whole EV movement that is gaining traction today. The difference with Rivian is that they have to overcome the big established legacy car makers who are now entering the EV game. Even if they don't have experience building electric vehicles, they still have plenty of experience building vehicles. In my option, that's the biggest threat to Rivian.

This is the new Grand Cherokee plug-in hybrid. If Jeep decides to make a fully electric version of this vehicle, I'd completely forget about the Rivian R1S and get the Jeep in a heartbeat. That right there is the biggest challenge for Rivian--completing with the legacy automakers in the truck and SUV segment. When the legacy companies catch up, it's going to get really competitive. And that's good for all of us who do want to go electric.

Interesting. I wouldn't make that jump. The Grand Cherokee did not impress me when I was test driving and ended up with my 4Runner. I didn't mind the old Cherokees (driven for work), but never felt I'd want to own one. I guess I'd consider jumping ship if Toyota were really in the game, but I'm not sure if I'd do it. I have not really liked US manufactured trucks and SUVs with the possible exception of my Diesel full size Jimmy (mid 80's). They just never feel right. I'm excited about buying a US made truck that doesn't feel like one.

 

[White Shadow]

That's funny....I owned a 4Runner before I purchased my Grand Cherokee. It was like going from the Flintstone's Flyer to the Jetson's flying car (whatever it was called). The 4Runner is just so old with old tech. I mean, even today you still get a 5-speed transmission. No thanks. The Grand Cherokee has features like a Land Rover, but competes with the 4Runner on price. And my Grand Cherokee has been 100% free of issues, although people say that Jeeps can tend to have issues.

If you look at the Grand Cherokee I pictured above, it's a Summit model and the technology in it is simply fantastic. It's got some really cool stuff like massaging seats, night vision, a passenger side touchscreen that does a variety of stuff. Plus it looks fantastic for a midsize SUV.

 

[Rob Stark]

The cost efficiencies of buying parts at scale, and the predictability for vendors dealing with large established manufacturers... these are massive advantages that even Tesla does not yet have.

Global Sales in Units 2021
Ford 6.6M
GM 6.3M
Tesla 936k

Tesla grows 40-80% every year.
GM and Ford have been shrinking for Decades. Sometimes 1% sometimes 10%. Every now and again small growth YoY.

Any smart supplier would give Tesla at least the same priority as GM and Ford.

 

[Guy]

Ford has stated that it’s essentially making MSRP and dealer invoice the same price, at least on their EV segment. That would effectively let them mask cost increases on those models for the short term (notice the lack of discounts available).

+1 for the “not worried about immediate profitability” camp. Focus on growth

They will still be giving the dealer some money for sales. Invoice vs MSRP was not the only way a dealer got money from the OEM. There were holdbacks etc. The bigger saving is no manufacturer discounts and no advertising needed at this stage.

 

[Inkedsphynx]

Global Sales in Units 2021
Ford 6.6M
GM 6.3M
Tesla 936k

Tesla grows 40-80% every year.
GM and Ford have been shrinking for Decades. Sometimes 1% sometimes 10%. Every now and again small growth YoY.

Any smart supplier would give Tesla at least the same priority as GM and Ford.

Suppliers work with what is, not what might be.

No smart supplier would give Tesla the same priority for orders right now when the orders are likely to differ in magnitude by a factor of 5x+. That is not smart business.

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