My unsolicited five step plan for saving Rivian

[evhelphub]

I agree with "Mall edition."

Coil suspension, no air compressor, remove the wood, third row, single motor option, 300 miles of range for below $70k.

The issue I see might be what Elon called out a long time ago. Trying to do everything at once. They are trying to copy every offering that Tesla has, which isn't a bad idea, but I assume it's hard to fund RAN, ADAS, R2 facilities, R1 facilities, software, R & D, service centers, spaces, etc.

It's a lot.

I'd personally kill the RAN expansion for now, stop with Driver+, implement AA and car play and cut software development down a bit.

I believe Rivian will be ok once interest rates drop, tech companies stop laying off their employees, and the economy improves.

I do think getting rid of another $10k of MSRP would really help, though I would not force pre order holders to buy. They could just cancel, leave unhappy, and never consider the brand again.

Here's my optimistic view for Rivian:

• They will get both production and prices down further, but still offer great products this year.
• Interest rates will come down in Q3/Q4 and companies will start hiring again.
• R2 is going to be a big hit, generate lots of positive headlines and mostly importantly, reservations.
• More people will become aware of and interested in Rivian, which will result in some additional R1 sales.
• Rivian will use this to get $3 - $4 billion in additional funding.
• In 2025, economy is much healthier, losses have been reduced, costs are getting under control.

This is pretty much the path I see for Rivian. If R2 does not generate reservations or buzz, I'm not quite sure they make it.

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[hilld]

I agree with having to have lower entry prices. Bring back the Explore edition (T & S) and the 5 seat variant of the R1S. Get rid of the glass roof, camp speaker and perhaps even the air suspension for the lowest trim levels. The glass roof alone is expensive and since they already stamp the roof panel, removing the requirement to punch out the opening for the glass roof would save costs (quite a bit I would think). Also get rid of the powered charge port door, a simple opening door (think gas cap door) should be sufficient.

I bet you could easily remove $5-7k (or more) from the cost of each vehicle (in lower trim levels).

 

[carsly]

I agree with "Mall edition."

Coil suspension, no air compressor, remove the wood, third row, single motor option, 300 miles of range for below $70k.

The issue I see might be what Elon called out a long time ago. Trying to do everything at once. They are trying to copy every offering that Tesla has, which isn't a bad idea, but I assume it's hard to fund RAN, ADAS, R2 facilities, R1 facilities, software, R & D, service centers, spaces, etc.

It's a lot.

I'd personally kill the RAN expansion for now, stop with Driver+, implement AA and car play and cut software development down a bit.

I believe Rivian will be ok once interest rates drop, tech companies stop laying off their employees, and the economy improves.

I do think getting rid of another $10k of MSRP would really help, though I would not force pre order holders to buy. They could just cancel, leave unhappy, and never consider the brand again.

Here's my optimistic view for Rivian:

• They will get both production and prices down further, but still offer great products this year.
• Interest rates will come down in Q3/Q4 and companies will start hiring again.
• R2 is going to be a big hit, generate lots of positive headlines and mostly importantly, reservations.
• More people will become aware of and interested in Rivian, which will result in some additional R1 sales.
• Rivian will use this to get $3 - $4 billion in additional funding.
• In 2025, economy is much healthier, losses have been reduced, costs are getting under control.

This is pretty much the path I see for Rivian. If R2 does not generate reservations or buzz, I'm not quite sure they make it.

I'm with you on the plan. Especially pursuing simpler vehicle, pausing RAN expansion, Driver+ development and adopting AA/Carplay in the near-term. Frankly 10 years in FSD isn't done, so pausing Driver+ for a year or two is pretty insignificant. And with Rivian's running on Tesla Superchargers in weeks to months not sure why they would spend any money on RAN. Maybe sell the existing network to EA, EVGo or someone else to recover some cash.

I still think R2 needs to get out in the world in 2025. Even if it's the slow launch like Porsche has done with the Macan EV of having some limited test drives well in advance of production and starting a pilot line in Normal next year (don't wait on the new plant).

BTW, there is yet another stop sale on the Chevy Blazer EV (https://www.edmunds.com/car-news/our-long-term-chevy-blazer-ev-is-back-not-totally-fixed.html) so Rivian can start to run the table with R2 -- if it gets out in 2025.

 

[docwhiz]

Well, burning $1.5+B in cash a quarter won't work. I've worked with many distressed businesses, including high-growth startups, that begin to run into cash crunches - sometimes they miss estimates of demand at a price point, sometimes it's a lack of attention to detail on the cost side, other times it's trying to invest in anything, everything, all at once (self-driving, subscription services, suspension turning, adding configs, new facilities/factories, staff that aren't really needed for 12-24 months, securing best marginal price on parts which often means larger order volumes and higher working inventory levels). You name it, I've seen it. The one that just about every company struggles with is forecasting working capital needs. If Rivian is sitting on excess finished goods inventory, as they are, that inventory has carrying costs and tends to depreciate the longer it sits on lots. Meanwhile, that's cash that is not available to support other business needs. Some of this is expected, they can/should build up ~15-30 days of inventory as shipping via rail takes time and they want some cushion to keep generating revenue while the factories are down for retooling/refitting. But here we are, and the picture isn't the worst, but it's difficult to support as a prospective vehicle buyer and investor.

Feel free to pick it apart, I don't work at Rivian nor do I know anyone who does. It's just a layman's plan from the outside, but one that will probably work.

1. Cut deeper/faster: 10%? Should start at 20-25% and monitor daily. 10% is a "we're not serious". Most companies will start at 15% and then add another 10-15% in six months. Every day these decisions is delayed is cash you can never get back. And every dollar saved increases probability of success, even if it takes a little longer to get there.
2. Innovate around the current offering: I'll give them credit here, dual-motor coming out last Fall was a great start as are the new Standard and Standard+ packs ...BUT.... the vehicles are effectively identical outside of motors and batteries. Sure, this worked for Tesla but it won't work for everyone coming after, that was a poor assumption. See what's coming to market in the R1 price band and you'll find different interior materials, things like HUD, different trim options, etc. My low-cost hack? Come out with a true "mall crawler+" edition that has five seats (third row extra $5K), 20" all seasons, steel wheels and maybe a tough-wearing fabric interior a la Polestar. Drop the gimmicky camp speaker and maybe even remove the air compressor. I'd also offer new paint flat paint colors, no metallics, to make it clearer to passers-by that this is the mall-crawler edition. Starting at $59,900, available today.
3. Build the R2 in tents in Normal in 2025: A la Tesla at Fremont, do NOT spend the capex now on the R2 facility. Basically slow roll the new factory and in the interim launch a R2 pilot production line in a sprung structure in spring 2025. Is that a rush job? Yes. May have to re-use the R1 front motor as the R2 rear motor in a single-motor config, go with a coil suspension and keep the Rivian looks. it's the Bronco Sport of the Rivian lineup. Re-using as many R1 parts as they can will hurt margins BUT it will accelerate time to launch - which is critical. Maybe the first vehicles are $60K models only with all the goodies and they build the cheaper configs once the second (real) plant is running. Putting a sprung structure in Normal, and re-using R1 parts, will make it easier for suppliers and much easier for Rivian's (now smaller) operations and logistics team to manage inflow/outlfow and quality at the single location. BTW, there is another hack here, and I shudder to mention it, but they can buy Ultium sleds from GM as are Honda/Acura and slap an R2 body on time simplifying the engineering dramatically.
4. Immediate salary/bonus freeze - probably through the R2 production launch, it's sink or swim. Everyone remaining gets additional option grants setting up a true win-win.
5. On the engineering side, find 2-4 things that Rivian can be exceptional at which will cause customers to pay attention. At 50-60k annual units Rivian is moving as many R1's as Tesla sells S/X - that's a monumental achievement, but it's insufficient for survival. They won't beat Tesla at FSD or GM's Supercruise (not yet, anyway) so for now Driver+ remains as adaptive cruise control. Full stop. I'd also take a hard look at the Apple Carplay contract and API's, this alone can get Rivian a demand bump in 2024. So Rivian is the outdoorsy company, check. Take a swat team of engineers, 4-6, and optimize the heck out of dual-motor offroad capabilities. Virtual lockers, crawl control, you name it. Make it as good or better than what anyone else has on the market. And then market the heck out of it. Rebelle Rally was a start, but most people have never heard of it. How about beating "Trail Rated" Jeeps on their own trails? And do it with solar and external battery packs - completely green.

That's it. Most organizations, no matter the size, have a hard time pulling on more than 3-5 strings if they have to go "all in". Sure, have departmental goals, etc. And delayer - no more than five layers from RJ to someone on the line or a service tech. Is this hard? Oh yeah, but less management helps the rest happen faster. Pick apart my plan or methods, I'd love to see Rivian succeed. But as a first-time CEO RJ may be an incredible engineer but is struggling with running a business. Claire is helpful, but he needs more. Not sure the recent hires have enough turnaround experience, and make no mistake this is a turnaround - now or by year-end. Best to take the bitter pill now, swallow hard, and dig in.

Good suggestions.
I particularly like the mall crawler idea. That will be their next big market. I don't need/want a third row.
I also like the suggestion to improve trail rated capabilities. This would be cheap and continue the adventure theme.

Yes, cash flow is a big problem.

 

[carsly]

A brand this strong doesn't just go away overnight. Heck, even crappy brands can linger for years and years (ie Fisker, and eventually Lucid).

Yes! and no.

Where have you gone Pontiac, Mercury, Saturn, Saab, Yugo, DeLorean, etc.

While they absolutely can, and do at times, linger that lingering requires a parent entity (like Geely with Polestar) who is willing to absorb the losses for years and years before making the hard decision - which at that point becomes obvious. Rivian stands alone, without sovereign wealth fund safety nets like Lucid, and right now that is a precarious place to be positioned.

 

[docwhiz]

The R2 steering wheel is a squircle. SELL NOW!

I love my Tesla S square steering wheel.
Much easier to turn and more comfortable hand positions.

 

[evhelphub]

I'm with you on the plan. Especially pursuing simpler vehicle, pausing RAN expansion, Driver+ development and adopting AA/Carplay in the near-term. Frankly 10 years in FSD isn't done, so pausing Driver+ for a year or two is pretty insignificant. And with Rivian's running on Tesla Superchargers in weeks to months not sure why they would spend any money on RAN. Maybe sell the existing network to EA, EVGo or someone else to recover some cash.

I still think R2 needs to get out in the world in 2025. Even if it's the slow launch like Porsche has done with the Macan EV of having some limited test drives well in advance of production and starting a pilot line in Normal next year (don't wait on the new plant).

BTW, there is yet another stop sale on the Chevy Blazer EV (https://www.edmunds.com/car-news/our-long-term-chevy-blazer-ev-is-back-not-totally-fixed.html) so Rivian can start to run the table with R2 -- if it gets out in 2025.

I agree, especially on RAN. It's not going to make money. I think it is a great idea long-term when they want to expand the business offering, but I'd stop all of that immediately, no R & D, no staff, nothing except servicing the existing units unless even that becomes expensive. Being able to use Tesla Superchargers will be the only selling point they need on charging.

Since production was cut by ~25k units, Rivian also needs to slow it down, take their time, and triple or quadruple check every single vehicle off of the line. Figure out who/where the issues are with some of these common problems, which they should have plenty of data on, and get rid of them.

Service centers should not be overloaded with fixing things like misaligned trim pieces, leaky suspensions, rattles, etc. There's no rush, take the time, do it right.

I'm still very optimistic about Rivian, that doesn't mean there won't be a ton of challenges, including a whole bunch with R2 that are yet to come. They will probably repeat a lot of this when that vehicle is launched. Product quality issues, overloaded service centers, product complexity, etc. But this will be a great learning experience and Rivian will be better for it.

 

[docwhiz]

All of this talk of acquisition and the need to seek out a foreign buyer is laughable. Rivian isn't anywhere close to this scenario and the sudden influx of this repeated assertion today is suspect. Pay little heed, folks..

They already have a captive deep pockets investor in Amazon. They won't go away.

 

[docwhiz]

Do you realistically expect people to move all over the country to staff service centers?

Companies do this all of the time.

 

[defcon888]

Also would help to give preorder pricing people a firm deadline to order before that pricing goes away. Won't be popular (and I'm one of those people) but it would clear those cheaper vehicles off the books once and for all.

those are good points.

My wife and I are going to put down $100 on the R2S on the 7th. Whatever the price is advertised at that time we should be locked into it. As the time gets closer to launch maybe raise it a bit.

Someone in another post suggested the following:

For current R1T or R1S owners, offer a discounted price (5 or 10%). The best way to sell vehicles is to have current users talk about why they got another one.

 

[sacramentoelectric]

those are good points.

My wife and I are going to put down $100 on the R2S on the 7th. Whatever the price is advertised at that time we should be locked into it. As the time gets closer to launch maybe raise it a bit.

Someone in another post suggested the following:

For current R1T or R1S owners, offer a discounted price (5 or 10%). The best way to sell vehicles is to have current users talk about why they got another one.

That's a great idea. I could convince my wife we needed an R1S if there was some kind of family discount.

 

[Epicloop]

I agree with having to have lower entry prices. Bring back the Explore edition (T & S) and the 5 seat variant of the R1S. Get rid of the glass roof, camp speaker and perhaps even the air suspension for the lowest trim levels. The glass roof alone is expensive and since they already stamp the roof panel, removing the requirement to punch out the opening for the glass roof would save costs (quite a bit I would think). Also get rid of the powered charge port door, a simple opening door (think gas cap door) should be sufficient.

I bet you could easily remove $5-7k (or more) from the cost of each vehicle (in lower trim levels).

Yes bring back the Explore trim, & option for removable roof panel instead of glass which may bring in some more buyers.
The powered charge port door looks like a potential break/fail point as well.
I love the capability of the R1 line but don't need such a nice trim level for an adventure vehicle.

 

[foxerson]

That's the smartest thing I have seen written on this thread!

Also if they offered leasing in my state that might justify an upgrade for my soon to be out of warranty Rivian.

+1 for adapting the R1 drivetrain and suspension to the EDV/ECV. #vanlife isn’t my thing, but it sure is for a bunch of people. I recall several posters on this forum eager to see a custom Rivian camper van build. It won’t be a high volume product. But it will draw a lot of attention in a niche market with some tolerance for a premium price tag.

 

[Honey]

I agree with "Mall edition."

Coil suspension, no air compressor, remove the wood, third row, single motor option, 300 miles of range for below $70k.

The issue I see might be what Elon called out a long time ago. Trying to do everything at once. They are trying to copy every offering that Tesla has, which isn't a bad idea, but I assume it's hard to fund RAN, ADAS, R2 facilities, R1 facilities, software, R & D, service centers, spaces, etc.

It's a lot.

I'd personally kill the RAN expansion for now, stop with Driver+, implement AA and car play and cut software development down a bit.

I believe Rivian will be ok once interest rates drop, tech companies stop laying off their employees, and the economy improves.

I do think getting rid of another $10k of MSRP would really help, though I would not force pre order holders to buy. They could just cancel, leave unhappy, and never consider the brand again.

Here's my optimistic view for Rivian:

• They will get both production and prices down further, but still offer great products this year.
• Interest rates will come down in Q3/Q4 and companies will start hiring again.
• R2 is going to be a big hit, generate lots of positive headlines and mostly importantly, reservations.
• More people will become aware of and interested in Rivian, which will result in some additional R1 sales.
• Rivian will use this to get $3 - $4 billion in additional funding.
• In 2025, economy is much healthier, losses have been reduced, costs are getting under control.

This is pretty much the path I see for Rivian. If R2 does not generate reservations or buzz, I'm not quite sure they make it.

don't forget about the E-bike

 

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Companies do this all of the time.

Usually they are filling there current positions in a new location. Not a new job classification, which may require a different skill set, and a different pay scale, in a new location.

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