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

[UnsungZero_OldTimeAdMan]

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.

I would bet on latter. Multiple times RJ talked about overall challenges with parts and suppliers. As an unknown entity, suppliers either didn't take Rivian seriously or wouldn't give them favorable break on pricing. Some wouldn't even return their calls. Imagine, you've got thousands of anxious reservation holders. You still have a production start target to meet. You can't get the price you need on the cameras you want. What do you do to keep cost capped and best chance of meeting deadline? Lower spec cameras. This very reason is why the VW JV is most significant... beyond the $5B figure. Any part order Rivian needs, and are shared with the VW Group, could be bundled into an enormous order, with much lower per unit cost (and higher priority status among all of supplier's orders).

Also, COVID first emerged in Wuhan in December of '19. The R1 concepts were first shown to the world just a year prior at LAAS, November '18. The entire automotive industry saw parts shortages. Ford was parking thousands of unfinished cars in fields.

Sponsored

 

[dj200]

Here is an interesting analysis of the Rivian company highlighting the cash flow problems.

 

[doozenberg]

Yep totally agree. There is an exit possibility here. Would gut the brand, but be good for investors.

why do so many think r2 is some knight in shining armor that will magically solve all their problems? How does getting to R2 solve their supply chain woes? Isn’t a higher volume ramp even MORE dependent on a smooth running supply chain? And won’t more Rivians jam up already backlogged SCs even more?

 

[doozenberg]

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.

Astute insights. Likely true.

 

[doozenberg]

Here is an interesting analysis of the Rivian company highlighting the cash flow problems.

Chilling analysis. Writing has been on the wall for a while now, accentuated even more with recent delivery numbers.

 

[Jonger1150]

They might be better off not selling any R1s if it eats into money needed for the R2.

Keep in mind, Tesla was put on the map with the Model S at $100,000 a piece.

The Model S makes up less than 10% of their sales today.

 

[k3g]

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.

That's their electric van though. Large cargo capacity, loads of outlets, minimal features.

 

[PaythePiper]

Seriously? He started building a plant everyone said was a bad idea and then bailed on it. He also spent $$ on an R1 refresh no one asked for. And he failed to invest quickly in service centers 2 years ago when folks said that was where the $$ should go. He can’t get consistent quality. Stock is down 90%+.

Why be so beholden to this guy? Because he designed oval headlights?

(appreciate your point of view)

It’s political man. This brand is very liberal heavy. They vote with feelings instead of facts. Facts you greatly explained. But hey, he’s a nice guy, so he does no wrong……. Suckers

 

[Arbitrator]

Dropping production estimates for Q4 because of "supply issues" on a shared part for R1 and RCV . Just curious to know if anyone knows what the shared part is ?

Dropping production estimates for Q4 because of "supply issues" on a shared part for R1 and RCV . Just curious to know if anyone knows what the shared part is ?

if Rivian‘s problem is not related to supply issues, but rather demand issues as many on this forum have suggested, then maybe Rivian should invest in some quality mass advertising. All of us who have either owned the Rivian and/or participate in this forum are quite familiar with the vehicle. However, we are clearly in the minority. Even Lucid has done mass market advertising. The Rivian vehicles are superior, but only a tiny segment of market know that and they need to introduce the vehicle to the mass market, regardless of the price point. Rivian is competing against Mercedes-Benz, BMW, and Cadillac, all of whom have substantial advertising presence in contrast to Rivian which has none.

 

[SASSquatch]

Before Tesla, there hadn't been a new OEM Automaker in 100 years for a reason: it's really hard.

RJ has done about as well as you could have given how challenging it is to start a new car auto company and to actually come to market with a compelling product that people want to buy. There are plenty of examples of failed EV companies - just look at Fisker - and this wasn't their first rodeo so you think they would have learned from their first failure.

Rivian right now is running into several huge headwinds:

• Consumer demand - there aren't enough people willing to fork out six figures for a premium EV SUV/Pickup right now, no matter how capable and compelling it is.
  • When Tesla entered the market with the S and then the X, there simply wasn't ANY viable competition. Tesla had the market to themselves. Owning an S or X became a status symbol in flush with cash silicon valley
  • Rivian faces significant competition in the current market.
• Capital expenditures - Rivian is spending money at an alarming rate and they simply don't have the sales or profit margins (they are still profit negative on every vehicle they sell)
• The only path to profitability is to offer a compelling product at a lower price point that they can sell at volume. This was the only way Tesla was going to survive and they only way Rivian will survive.
  • Except, they are rapidly running out of runway and capital at a time where consumer sentiment towards EVs has shifted because of politics, lack of understanding, misinformation, and affordability.
• The only way Rivian survives is to form strategic partnerships with other OEMS flush with legacy ICE cash. That or borrow heavily or be acquired (see my other thread on this topic).

Edit: One more thing: Rivian really needs to consider offering a subscription service that includes insurance and offers short commitments (3-6 months) that can then be converted into a traditional lease or even purchase if the buyer wants. This would allow consumers and opportunity to experience a Rivian with low commitment while serving as a potentially effective way to boost sales.

 

[Donald Stanfield]

It’s political man. This brand is very liberal heavy. They vote with feelings instead of facts. Facts you greatly explained. But hey, he’s a nice guy, so he does no wrong……. Suckers

This has NOTHING to do with politics. That's a real shit take.

 

[DuoRivians]

Chilling analysis. Writing has been on the wall for a while now, accentuated even more with recent delivery numbers.

These guys have Rivian trolls forever. Ignore them

 

[doozenberg]

These guys have Rivian trolls forever. Ignore them

By troll, do you mean short sellers? Honest question. I know there was a large disinformation (and to some extent still today) short seller campaign against Tesla back when they were days from going bust

 

[PaythePiper]

This has NOTHING to do with politics. That's a real shit take.

Whatever. I see all the ‘Elon is a maniac’ posts and such with this brand. Everyone loves RJ and he can’t do no wrong. Total liberal take. Thats what I meant. I’d like to see some criticism from people on his decisions in here.

 

[Donald Stanfield]

Whatever. I see all the ‘Elon is a maniac’ posts and such with this brand. Everyone loves RJ and he can’t do no wrong. Total liberal take. Thats what I meant. I’d like to see some criticism from people on his decisions in here.

Sponsored