DuoRivians
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Earnings solid. Revenue, margins all heading in the right direction.
Notes from earnings call Q&A:
- 35% cost reduction in EDV realized already. Expect this same magnitude of material cost reduction in R1 next year
- EDVs are contribution margin positive. Contribution margin positive in R1s later this year with the introduction of max pack
- Confident in the R1 backlog deep into 2024
- Data to share with Tesla via charging stations: there is no data transfer built into the relationship.
- Rivian designed own ECUs, away from Tier 1 ECUs that other OEMs use. This enables Rivian to own software stack and push updates more readily, and not be confined by Tier 1 ECU functions.
- Next year, 60% reduction of ECUs in R1s next year. 25% reduction in wiring harness. $thousands cost savings per vehicle. Forms basis of R2.
- R1S / R1T : next quarter or two, 70%+ will be R1S production. Long term: 70% R1S / 30% R1T
- Close partnership with Rivian / Amazon: very confident that Amazon will allow Rivian to sell EDVs to others very soon. With Amazon's large position in $rivn, incentives are aligned.
- Pricing of R1 vehicles: Dual motor and future standard pack options allow R1s to fit into different budgets. Feel confident in current pricing. Also, Rivians have among the best residuals: another point that current pricing is appropriate.
- Continue to pursue strategy of producing all powertrain in-house: possible signal that quad motors will eventually be built in-house too.
- Rivian Insurance is currently a profitable segment.
- Rivian Gear sales will become bigger, especially with R2.
- Have plans for software subscriptions via Rivian, eg. in EDVs and in consumer side (features that require high software development complexity, high compute needs)
- Factory re-rate in mid 2024: 65K to 85K R1 capacity. Step change in cost structure. (Not really new news but good to hear reiterated)
- Future capital raise for Rivian: continue to evaluate opportunities with diversified approach, but no specifics on *when* mentioned.
- Rivian 1 Day Sale Event: these vehicles were late customer un-matches and opportunity to sell these locally without incurring transportation costs. Was mostly an experiment.
Notes from earnings call Q&A:
- 35% cost reduction in EDV realized already. Expect this same magnitude of material cost reduction in R1 next year
- EDVs are contribution margin positive. Contribution margin positive in R1s later this year with the introduction of max pack
- Confident in the R1 backlog deep into 2024
- Data to share with Tesla via charging stations: there is no data transfer built into the relationship.
- Rivian designed own ECUs, away from Tier 1 ECUs that other OEMs use. This enables Rivian to own software stack and push updates more readily, and not be confined by Tier 1 ECU functions.
- Next year, 60% reduction of ECUs in R1s next year. 25% reduction in wiring harness. $thousands cost savings per vehicle. Forms basis of R2.
- R1S / R1T : next quarter or two, 70%+ will be R1S production. Long term: 70% R1S / 30% R1T
- Close partnership with Rivian / Amazon: very confident that Amazon will allow Rivian to sell EDVs to others very soon. With Amazon's large position in $rivn, incentives are aligned.
- Pricing of R1 vehicles: Dual motor and future standard pack options allow R1s to fit into different budgets. Feel confident in current pricing. Also, Rivians have among the best residuals: another point that current pricing is appropriate.
- Continue to pursue strategy of producing all powertrain in-house: possible signal that quad motors will eventually be built in-house too.
- Rivian Insurance is currently a profitable segment.
- Rivian Gear sales will become bigger, especially with R2.
- Have plans for software subscriptions via Rivian, eg. in EDVs and in consumer side (features that require high software development complexity, high compute needs)
- Factory re-rate in mid 2024: 65K to 85K R1 capacity. Step change in cost structure. (Not really new news but good to hear reiterated)
- Future capital raise for Rivian: continue to evaluate opportunities with diversified approach, but no specifics on *when* mentioned.
- Rivian 1 Day Sale Event: these vehicles were late customer un-matches and opportunity to sell these locally without incurring transportation costs. Was mostly an experiment.
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