R1 refresh update coming in 2024 with upgraded “Ascent” trim / model

[fbkr]

They have just about exhausted demand at current price points within their existing service radii. That's why the R1T/S shops are now open to all with just 1-2 week delivery times in areas that Rivian services. Keeping the prices up is a charade until they can start taking out big chunks of cost. If I were them I'd do my factory shutdown the last two weeks of March (helps justify lower Q1 production and delivery numbers to the Street) as they drive down COGS per vehicle. April should then see lower-priced variants coming available and if Q2 numbers are light can also justify that due to the ramp of the lower-priced vehicles. That buys them until Q3. It's a tightrope.

Until I start to see the number of R1S vehicles in the shop inventory meaningfully increase, I think its hard to say that they have a demand issue.

Let's say they make 9,000 R1S a quarter now (likely conservative). That's 100 per day. There are usually about ~100 R1S vehicles in the shop and that has not been going up even before they started offering leasing. That level of inventory is only one day's worth of production. The average gas car is probably sitting at 60 days, and average EVs are closer to 100.

I suppose the big question is what that will look like when the backlog is fully exhausted. But even the R1T is probably only at ~20 days of inventory and the backlog has been gone there for a while.

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[carsly]

Until I start to see the number of R1S vehicles in the shop inventory meaningfully increase, I think its hard to say that they have a demand issue.

Let's say they make 9,000 R1S a quarter now (likely conservative). That's 100 per day. There are usually about ~100 R1S vehicles in the shop and that has not been going up even before they started offering leasing. That level of inventory is only one day's worth of production. The average gas car is probably sitting at 60 days, and average EVs are closer to 100.

I suppose the big question is what that will look like when the backlog is fully exhausted. But even the R1T is probably only at ~20 days of inventory and the backlog has been gone there for a while.

I get your approach, let me offer an alternative:

Rivian is only showing one of each available configuration in the store, e.g., if there are 10 Black R1S on 21's with black mountain interior and no other options you're not seeing 10 of them, you see just one. This accomplishes two things (at least):
1 - facilitates search for buyers, it would be a PITA to wade through dozens of identically configured vehicles
2 - facilitates matching for the factory - they can match the order to an available vehicle based on location after the deposit has been placed, otherwise you run into the issue of manufacturing batching and erratic demand by region resulting in excess movement of vehicles
3 - obfuscation - no way anyone on Wall Street can use the Shop to gauge inventory levels
4 - more obfuscation - if customers see supply levels rising, we'll do the rational thing and curb buying waiting on inevitable discounts as Rivian will need to free up working capital; also raises questions about desirability (as do the super-short order to delivery times)

I could be dead wrong. Just thinking about other explanations.

 

[fbkr]

I get your approach, let me offer an alternative:

Rivian is only showing one of each available configuration in the store, e.g., if there are 10 Black R1S on 21's with black mountain interior and no other options you're not seeing 10 of them, you see just one. This accomplishes two things (at least):
1 - facilitates search for buyers, it would be a PITA to wade through dozens of identically configured vehicles
2 - facilitates matching for the factory - they can match the order to an available vehicle based on location after the deposit has been placed, otherwise you run into the issue of manufacturing batching and erratic demand by region resulting in excess movement of vehicles
3 - obfuscation - no way anyone on Wall Street can use the Shop to gauge inventory levels
4 - more obfuscation - if customers see supply levels rising, we'll do the rational thing and curb buying waiting on inevitable discounts as Rivian will need to free up working capital; also raises questions about desirability (as do the super-short order to delivery times)

I could be dead wrong. Just thinking about other explanations.

You are definitely right about them only showing one of each available configuration. Someone pointed that out to me with regards to the R1T shop when the inventory there was hovering around ~500 for a long time and its true - you won't find two of the exact same config (I tried).

The question for me is why we wouldn't see the R1S inventory also go up to, say 500 of the more popular configurations like we have seen with the R1T. As far as I can tell the R1S and R1T have roughly the same number of possible configs (same # of colors, interiors etc.).

 

[carsly]

You are definitely right about them only showing one of each available configuration. Someone pointed that out to me with regards to the R1T shop when the inventory there was hovering around ~500 for a long time and its true - you won't find two of the exact same config (I tried).

The question for me is why we wouldn't see the R1S inventory also go up to, say 500 of the more popular configurations like we have seen with the R1T. As far as I can tell the R1S and R1T have roughly the same number of possible configs (same # of colors, interiors etc.).

That I don't know. Would suppose the end of 'Launch Editions' would cut the number roughly in half and then the end of Compass Yellow knocks off some more. On the other side we now have dual motor and dual motor performance which didn't exist previously as well as the max pack so the number should triple plus.

I guess we can do some math (if we have to).

Permutations should be (please correct me):

• 1 package - adventure
• 3 drive systems
• 2 batteries - ignoring quad/max doesn't exist for the moment
• 8 colors
• 5 wheel/tire options
• 5 interiors
• also ignoring the all-terrain package for the moment since it's just a set configuration of things above for the most part
• 2 PPF - yes/no

So that's 1x3x2x8x6x5x2 = 2,400 permutations, roughly. Not all are produced at all times it seems. That should be the most we'll ever see in the Shop. I suspect the Shop will show the most common ones on offer so you may not always see Limestone on Green interior with 22" black wheels, right now I don't even see Limestone with 22" sport darks in my R1S Shop. Given that they have the R1T and R1S if they had every variant available that's at least 5,000 inventory units or ~10% of last year's full production sitting around. I don't think that happens so we'll see current/planned configs show up based on order frequency and what's batching through the factory.

 

[carsly]

PS, I just counted 119 R1S in my shop. One factor I neglected to include is that Rivian wants to push the higher dollar vehicles so is more likely to show quads/dual-motor performance variants in non-silver with other options in order to keep ASP higher. They likely could jam the shop full of dual motor regulars and keep churning quickly but they need to show positive gross margin per vehicle so really can't promote the regular duals until they can shut down, retool, and take out a chunk of cost per vehicle.

 

[fbkr]

PS, I just counted 119 R1S in my shop. One factor I neglected to include is that Rivian wants to push the higher dollar vehicles so is more likely to show quads/dual-motor performance variants in non-silver with other options in order to keep ASP higher. They likely could jam the shop full of dual motor regulars and keep churning quickly but they need to show positive gross margin per vehicle so really can't promote the regular duals until they can shut down, retool, and take out a chunk of cost per vehicle.

I see ~108 in the bay area. That's the other wrinkle. Seems like they typically show something close to regional (maybe west coast, midwest, east coast)/national inventory in the shop, and then it becomes hyperlocal at the end of the quarter. I'm not sure if any of the 108 R1S in the bay area overlap with the 119 you see on the east coast which makes it difficult to gauge overall inventory. I usually just look at the same zip code shop over time.

At a high level I agree that Rivian's actions and evasiveness around questions around demand point to new order weakness. But until we get a few quarters where all or most of the orders are paying full freight, it's hard to tell what true demand looks like.

Is it 40k, 50k, 60k, or 70k R1S vehicles per year? That's what I wonder.

 

[dleewla]

Was at my local SC yesterday and floated the info out I originally had heard…. One of the staff had the following to say:

- Indirectly confirmed the existence of a higher-end model (didn’t confirm the name)

- Expected it to drop in Q3’24

- The light bar would be about half the thickness, but still have the same headlights

- There would be other minor aesthetic modifications, including some body changes

- Said it’s an in-house quad-motor

- Chuckled at the comment about the front tires coming off the ground during initial testing and speculated that was a bit hard to believe, but said it was “well over 1000hp”

That’s about all the nuggets I can remember!

they are burning through cash, the R2 model is still 2 years away minimum, they have made good progress on production and delivery ramp up and lowering costs. they should continue to be all in on lowering cost to produce existing models and trims as thats the only way they are going to make a profit per vehicle over the next two years. why complicate the production line, supply chain and introduce new costs with a new trim/motor/body? unless doing all this does that, then it makes no sense to me.

 

[Dark-Fx]

they are burning through cash, the R2 model is still 2 years away minimum, they have made good progress on production and delivery ramp up and lowering costs. they should continue to be all in on lowering cost to produce existing models and trims as thats the only way they are going to make a profit per vehicle over the next two years. why complicate the production line, supply chain and introduce new costs with a new trim/motor/body? unless doing all this does that, then it makes no sense to me.

IMO, they won't intend on selling a huge mix of them, but are going to put a bigger margin into that trim. Quad and Dual Performance are just plain too close together price wise and performance wise. There's likely a decent chunk of people that are going to trade up, myself included.

RJ himself has said in the past that he believes there is room to go further up-market.

 

[larrydallas]

they are burning through cash, the R2 model is still 2 years away minimum, they have made good progress on production and delivery ramp up and lowering costs. they should continue to be all in on lowering cost to produce existing models and trims as thats the only way they are going to make a profit per vehicle over the next two years. why complicate the production line, supply chain and introduce new costs with a new trim/motor/body? unless doing all this does that, then it makes no sense to me.

I don’t disagree with you. Just relaying what I heard! That said, it does seem like there’s more elasticity at the higher “luxury” end of the market. As long as producing a higher-end trim didn’t require many alterations to the mfg line, then perhaps it’s a way to increase Avg Selling Price in conjunction with lowering costs? Again, I’m not an expert at all. Intent of the thread was simply to try to help keep thr community informed.

 

[R1Tom]

IMO, they won't intend on selling a huge mix of them, but are going to put a bigger margin into that trim. Quad and Dual Performance are just plain too close together price wise and performance wise. There's likely a decent chunk of people that are going to trade up, myself included.

RJ himself has said in the past that he believes there is room to go further up-market.

I am hoping they make it a true halo vehicle. Variable light dimming sun roof, premium branded audio, massaging seats, power connectors on each side of truck, power up/down rear tail gate, etc... Target price $130-$150k.

 

[Supratachophobia]

I see ~108 in the bay area. That's the other wrinkle. Seems like they typically show something close to regional (maybe west coast, midwest, east coast)/national inventory in the shop, and then it becomes hyperlocal at the end of the quarter. I'm not sure if any of the 108 R1S in the bay area overlap with the 119 you see on the east coast which makes it difficult to gauge overall inventory. I usually just look at the same zip code shop over time.

At a high level I agree that Rivian's actions and evasiveness around questions around demand point to new order weakness. But until we get a few quarters where all or most of the orders are paying full freight, it's hard to tell what true demand looks like.

Is it 40k, 50k, 60k, or 70k R1S vehicles per year? That's what I wonder.

As just a comparison to Tesla once again. The first signature Model S rolled off the line in 2012. My late 2014 was high 40k VIN and my early 2016 was mid 120k VIN. Correct me if I'm wrong, but Rivian is tracking close to or better than that roughly?

 

[DuoRivian]

As just a comparison to Tesla once again. The first signature Model S rolled off the line in 2012. My late 2014 was high 40k VIN and my early 2016 was mid 120k VIN. Correct me if I'm wrong, but Rivian is tracking close to or better than that roughly?

They are but I would hope they are doing as well or better than a sedan from 10 years ago when electric cars and the infrastructure were in their infancy.

 

[dleewla]

I am hoping they make it a true halo vehicle. Variable light dimming sun roof, premium branded audio, massaging seats, power connectors on each side of truck, power up/down rear tail gate, etc... Target price $130-$150k.

we shouldnt need a halo trim for them to give us a premium audio system. were paying $90-100k now and the audio is not much better than my 2013 Lexus that cost half as much. imo the weakest part of the current R1 line... other than maybe the glass roof

 

[windblowlc]

IMO, they won't intend on selling a huge mix of them, but are going to put a bigger margin into that trim. Quad and Dual Performance are just plain too close together price wise and performance wise. There's likely a decent chunk of people that are going to trade up, myself included.

RJ himself has said in the past that he believes there is room to go further up-market.

Unless I'm mistaken, bigger margin price-wise is of less importance than renewing interest in the line for Rivian. As of now, the more they can sell, the more profits in the books from here on end. You don't want to price the top end high enough to lower interests in the entire brand - that would be going against EV market trends. Let's not follow Porsche's pricing structure - a Rivian is not a Porsche.

 

[Supratachophobia]

we shouldnt need a halo trim for them to give us a premium audio system. were paying $90-100k now and the audio is not much better than my 2013 Lexus that cost half as much. imo the weakest part of the current R1 line... other than maybe the glass roof

Do not dog the Lexus audio system. Mark Levinson was a god damn genius.

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