What part is Rivian missing that's causing supply / production issues?

[wjhdrew]

My forum experience is so much nicer but also confusing when I can't see troll posts xD

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[UnsungZero_OldTimeAdMan]

My forum experience is so much nicer but also confusing when I can't see troll posts xD

Check your user settings. You can set it to show ignored posts, without showing content.

 

[AllInev]

FYI, these are the folks directly responsible for production issues -both the good and the bad:

CEO, RJ Scaringe - https://www.linkedin.com/in/rj-scaringe-58355716/
VP Supply Chain & Logistics, Andreas Reutter - https://www.linkedin.com/in/andreas-reutter-945721185/
COO, Javier Varela - https://www.linkedin.com/in/javier-varela-a597b566/

For our warranties and long-term ownership experience, let's hope they get better (much better?) at their jobs. If these production issues continue into the R2 launch, I don't see a viable path for Rivian to exist as a stand-alone company.

 

[Electrified Outdoors]

The auto market is a tough place to be right now regardless. Heck Ford is now offering 2.9% on the Lincoln Navigator for 84 mo. People are not buying luxury vehicles and let’s face it folks the R1 is a luxury vehicle…though I feel it’s at a very value for what you get.

RJ I think is a good CEO faced with a rapid change in the market and is struggling…as anyone would be…to adapt this young startup to get Rivian through to R2.

has he made some mistakes…probably. Has he gotten some bad advice…I’m sure.

my biggest concern right now is service because most buyers will not accept long distance to service center or extremely long wait times. It’s my hope Rivian can continue to expand its service network.

 

[dradam]

Well this thread has changed a lot from my start this AM. LoL still curious to know the part....

Regardless:

This company has been kicked in the balls by Covid, the economy, supply chain, and still managed to put out a remarkably interesting and well received set of products. Just when things were getting worse, they upped the lineup to make it better and more cost-effective. Still to rave reviews.

Yes, there’s a lot to fix including service, quality issues, and more. But it sure doesn’t seem to me that they have given up and continue to make the vehicles better.

There is a learning curve and clearly the forces are not well aligned just yet. But I’m still betting on them.

I knew what I was getting into and I have zero regrets.

Love my R1. Have an R2 order pending. I hope that is the tipping point just like the Y and three were tipping points.

Would much rather listen to RJ than to know who.

 

[majorfriend]

Rare is the person who can both design the widget and then successfully run the company (Musk is an idiot, but the definite exception). If we were in the lender group we would be looking to exit.

I don't know about this, companies successful over long periods of time tend to be run by the people who built the thing. Look what has happened to Boeing when they moved away from executives with engineering background...

 

[ThirteenElectrics]

The missing “part” could be demand.

Maybe there is a shortage of part X or part Y. Things happen all the time. But maybe instead of working around the issue, or getting a second source, or paying more for a better version, or committing to buy more in order to secure supply, Rivian does none of these things, and uses it as an excuse, guessing that Wall Street will take a supply issue better than they will a demand issue.

That said, I believe Rivian made a strategic error in failing to secure their battery supply years ago, which is why their production forecasts showed no growth (even when there was demand) and they’re trying to move to crappy LFP. It could well be batteries coming back to bite them in the ass again.

 

[BigSkies]

This is pretty disappointing. I don’t see the point in speculating on details we’ll never learn anyways.

What I really need to hear is what their plan is to get out of this. Is this something that’s only going to impact 2024, or is it going to extend into 2025?

After that, what’s the new gross margin forecast? Being 10k vehicles short assuming and $85k ASP (I don’t care enough to look up the actual number) is $850M in lost revenue. They aren’t going to get to positive gross margins with a revenue miss that big. That’s a big enough number to also impact their capital picture, even with the VW money.

Are we talking about delaying positive gross margins by one quarter, six months, or a year? I suspect Q1 is manageable. Much longer than that means they should probably just look for a buyer now.

 

[ndmiller]

Just keep ignoring the trolls, your forum experience will get better.

 

[mkg3]

I recently read that Inos stopped production and gave no reason other than the same story Rivian told this morning. It turns out as reported by news sources that its was Recaro seat mfg that filed for bankruptcy that caused the disruption.

I have no idea if Rivian uses Recaro parts or that they are simply too low on the food chain so they get bumped if the supplier runs short and bigger fish wants the parts.

In either case, what troubles the most is the delivery for this quarter. While RJ reaffirmed the total year deliveries, they will produce much less - which means that they have inventory built sitting on their lots. In other words, its a demand problem being masked, not to mention the carrying cost of built inventory, which will exasperate the loss/vehicle number.

Macro economic conditions and still high interest rates are having affect on people's purchasing decisions. Additionally, EV9 is heavily discounted by KIA to take hold of the market share. One can argue all day that Rivian is an adventure vehicle and the Kia is a soccer mom minivan replacement but sales are sales.

R2 cannot happen soon enough and there needs to be a base R1 that starts in the low $60s with decent range. I am very certain that more base model will sell than try-/quad- motored Acent models that cost twice as much.

 

[LittonLad]

I don’t know how feasible it is, but I like the idea of a very basic R1T, perhaps aimed at light duty contractors, without the bells and whistles. A cheap R1T could do well.

 

[Riviot]

The refresh was the car they originally wanted to start with, but couldn't because the motors weren't ready.

And cameras. And chips. And...

 

[DuoRivians]

It was a supply issue on the motors. RJ said so on the latest Morgan Stanley conference a few weeks ago

 

[Supratachophobia]

And cameras. And chips. And...

I go back and forth on the cameras. Either they picked in 320p cameras during the design phase on purpose, or 320p cameras were the best they could get with G1 at the time.

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