Leadership

[hed]

Expecting flawless execution from a 35 year old CEO with no previous business experience may be a bit much. I expected growing pains from a new company. This was one of them. They took immediate action after a misstep and that’s better than you’ll find in most of the “established” business community.

A valid perspective.

I think there is some debate between how much of this is inexperience coupled with a "bro" culture of corporate behavior versus just plain inexperience. Time will shed more light.

If ever a company needed a good communications team, Rivian is it.

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[Matt D.]

A valid perspective.

I think there is a debate between how much of this is inexperience coupled with a bad culture of corporate behavior versus just inexperience. Could be both.

If ever a company needed a good communications team, Rivian is it.

I think the inexperience could be contributing to the bad culture of corporate behavior.

 

[lostpacket]

Just wanted to say I appreciate the discussion y'all. Some great points you folks are bringing up I hadnt considered.


But this thread needs a quick interlude for a star trek meme

 

[0=====0]

Here is my concern with all of this debacle!

Pricing was set in 2019 for something that was going to be shipped in 2021/22.
Inflation and Covid hit and prices for the parts needed went up 15-20%!!!

Tesla had the same issue with Cybertruck where they removed pricing from their website.
Lots of other OEM's increasing the prices as well.
So you would think the Management team would learn from this Right?

Wrong!
They are making the same mistake again!
For the Dual motor version they are setting the price for something they will not ship till 2024!!!
So by the time they ship, they will have considerably less margins and looking to hike again!

 

[kylealden]

Combined with the discrimination lawsuit, this has me pretty sour on the Chief Growth Officer. I don't see how he fits into the culture and mission Rivian is professing.

I'm prepared for some hard business decisions, including raising prices, maybe even the occasional very ruthless changes necessary for survival. But this reeks of poor planning and leadership. I'm disappointed that RJ and others in the LT didn't see it coming, but heartened that they reacted quickly. But I think it's worth asking how it happened at all.

 

[BadKarma!]

I don't care for the CRO, Jiten Behl, either. It appears that he is at the center of the two black eyes Rivian has experienced to date. First, the lawsuit brought on by the fired exec, Laura Schwab, that holds serious credentials in the automotive world including President of the Americas for Aston Martin. They don't just give that job to anyone. She has a favorable pedigree and many years of experience and my gut and brain are leading me to believe her story.

This brings me to the second, and latest debacle, the pricing flop. Again, Behl, was a key player in the decision to raise the prices. If you read both of their LinkedIn profiles and nothing else, it appears that he is inexperienced, and way under qualified for his role at this level. I'm guessing he probably felt threatened by Schwab. Also, in the court filings of the lawsuit Schwab states multiple times that Behl "brushed her off" and didn't want her communicating her (pricing concerns) with RJ. Granted, she was sounding the alarm because she had done the research to prove the R1's were indeed under priced. Why would he do that?

To be clear, these are my opinions and my opinions only but something doesn't smell quite right with this guy. I'm not a gambler, but I would bet a few bucks he isn't long for his current role. Somebody is going to have to take the fall for this H U G E price hike mess.

 

[sevengroove]

Agreed.

As an investor, I am NOT amused by this because they left money on the table if only they’d handled this better.

As an example, a letter from RJ to reservation holders explaining that inflation is causing a 5% increase for existing reservation holders probably wouldn’t have gotten much push-back. He could have also explained that the costs even before inflation were off and that future reservations will be seeing price increases to reflect what they’ve learned. Then explain that Rivian values reservation holders who have been patiently waiting so only the inflation costs beyond Rivian’s control are being passed along. Reinforce that Rivian won’t pass along the cost estimate mistake they made onto their existing customers.

Agree with you that they left money on the table. I'm hoping they still have the bandwidth/window to incorporate some sort of price increase on the scale discussed (5% or less) through accessories and options. I posted this on a different thread but will reiterate here: happy that the base prices are back to what they were, and will not feel slighted if the new options pricing (e.g. $2k for ocean coast, underbody shield) sticks.

 

[KiloV]

Expecting flawless execution from a 35 year old CEO with no previous business experience may be a bit much. I expected growing pains from a new company. This was one of them. They took immediate action after a misstep and that’s better than you’ll find in most of the “established” business community.

Yep. This. Nicely said.

 

[COdogman]

After a mistake like this, someone near the top needs to get canned quickly and publicly. I’m sure there are multiple people at fault for a decision this dumb, but it always starts with someone pushing it.

 

[Ladiver]

After a mistake like this, someone near the top needs to get canned quickly and publicly. I’m sure there are multiple people at fault for a decision this dumb, but it always starts with someone pushing it.

Who is the least Bro of the Bros? Who will RJ have to take to dinner and stick with the bill? It will be someone well compensated to take the fall. Probably have to be someone willing to walk away from a career in the automotive and tech industries. This will be a Platinum Handshake.

 

[COdogman]

Who is the least Bro of the Bros? Who will RJ have to take to dinner and stick with the bill? It will be someone well compensated to take the fall. Probably have to be someone willing to walk away from a career in the automotive and tech industries. This will be a Platinum Handshake.

Exactly. I would start with Jiten Brehl, who already caused trouble for the company once before, resulting in a settlement. I wouldn’t be surprised to learn this was all his idea in the first place.

https://www.thedrive.com/news/44549...kes-were-planned-all-along-not-supply-related

 

[Zoidz]

I'm still concerned about their management choices as an investor, and I am concerned that this was planned and not disclosed in the S-1.

As a consumer, I am very much still concerned about the company decision making and consumer interactions going forward. RJ still doesn't get it.....

Only time will tell. RJ got it, after the fact, this time. I refer to this as a "2x4 upside the head" experience. Sometimes that makes all the difference and he does get it going forward. I'll admit that I've had a couple of those moments in my career, and it changed me for the better.

 

[johnking]

Last night before I went to bed thinking if RJ and team are just like Trevor Milton's (Nikkola trucks). I had this intuition that Rivian probably wants to focus on commercial vehicles like the Amazon van and cutoff the consumer market offerings. Was thinking what was their long term plan. Thankfully, I was surprised to see the email from RF this morning. I am glad they rolled back the changes and have started the process of trust building with us.

I am not sure if some executive is gonna be reprimanded. I just wished that they did not cause this in the first place.

I appreciate him stepping up to own the mistake.

 

[Canthoney]

So my concerns are if they were pricing this this high to break even, then they revert back for earlier pre-orders, then they may be losing potentially $700 million-$1 billion (based on $12k X 70k) on the 70k+ orders alone. Which brings me to my second point, they may not be profitable in the near or medium term because of their unexpectedly high production costs. I almost wish they would’ve done a minor price increase just to mitigate some of that, but we don’t honestly know what their unit cost is.

I would’ve been glad to pay a couple thousand more (not $15-20k more, but maybe $5-7k) if I knew the company would stick around longer. I’m just worried about the long-term survival at this point. I know they’re sitting on a big cash pile, but being in the car business is an ungodly capital intensive industry.

I would hate to get the car and then it end up like Fisker Karma

 

[Mcdubjr]

They should have been raising prices $1000 or so for new preorders every couple of months over the last few years. But they wanted good preorder numbers for the IPO so they didn’t. Now it’s going to make it harder to succeed in the short term. Bad decisions IMO.

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