All discussion of Rivian Automotive

[EVNow]

I'm usually a big fan of this type of number crunching, but I think it's premature here. If I were to wade in, I'd start by subtracting the 188m expense for inventory writedown/firm purchase as that won't be part of their long term cost structure. That gives us a ~400m starting point. I'd very roughly break that down as:

100m depreciation -- Of 118m total
100m labor -- assume fully staffed, 5k of 11.5k total employees on 1/1/22
100m parts/mat'l -- 80k per vehicle nominal cost (excludes the writedown/firm commit charge)
100m ???? -- scrap/rework, equipment recalibration, OT, employee training, off-site meetings in Cancun?

The first two are mostly fixed, spread over 40k vehicles a quarter vs. 1.25k they reduce from 160k per to 5k. The last two are pure guesses. I figure their nominal parts/materials must exceed 60k or they wouldn't have raised prices. But they must at least have a path to sub-100k, otherwise it would be a disclosure item. And I just don't see what would drive it to something crazy like 2x Taycan.

Finally, I don't think there's any way to compare vs. Tesla startup. Rivian is launching three vehicles almost simultaneously and planned to ramp 2-3x faster than Tesla. Rivian's IPO and go-to-market environment was also completely different -- investors cared only about speed and not at all about costs.

It’s going to be difficult to figure this out. We don’t know how much of their depreciation is linear vs per unit, for eg.

Either way, I think the most important thing to figure out is whether Rivian is like one of those highly funded dotcom era companies that spent big and just burnt out spectacularly or not. There is no easy way for an outsider to find this out. Tesla definitely was very conservative in spending which helped them survive.

 

[bkp_duke]

Ford continues to reduce their stake in RIVN:

Ford sells more shares of EV maker Rivian

Ford Motor has trimmed its stake in the electric carmaker Rivian Automotive for the second time in a week.

www.foxbusiness.com

 

[betstarship]

Ford continues to reduce their stake in RIVN:

Ford sells more shares of EV maker Rivian

Ford Motor has trimmed its stake in the electric carmaker Rivian Automotive for the second time in a week.

www.foxbusiness.com

On the other hand...

Soros fund doubles down on Rivian bet, buys stakes in Lucid, Nio

Billionaire George Soros’s investment fund has doubled down on its bet on Rivian Automotive Inc. and taken new positions on EV makers Nio Inc. and Lucid...

www.marketwatch.com

 

[Msicario]

On the other hand...

Soros fund doubles down on Rivian bet, buys stakes in Lucid, Nio

Billionaire George Soros’s investment fund has doubled down on its bet on Rivian Automotive Inc. and taken new positions on EV makers Nio Inc. and Lucid...

www.marketwatch.com

I don’t understand why Ford would buy so much stock, knowing that Rivian was going to be its prime EV truck competitor?
Then right when Ford’s Lightning is about to be released and RIVIAN is hurting; Ford sells millions of their stock; Like it was planned to put Rivian out of business

Rivian R1T is a superior truck than the top F150 Lightning at about the same price

 

[betstarship]

I don’t understand why Ford would buy so much stock, knowing that Rivian was going to be its prime EV truck competitor?
Then right when Ford’s Lightning is about to be released and RIVIAN is hurting; Ford sells millions of their stock; Like it was planned to put Rivian out of business

Rivian R1T is a superior truck than the top F150 Lightning at about the same price

...I'm...not sure what you're getting at. Rivian just sold and produced the most cars its ever been able to this past quarter and has 100k back order for their products. How do you see the company struggling?

 

[Brando]

I don’t understand why Ford would buy so much stock, knowing that Rivian was going to be its prime EV truck competitor?
Then right when Ford’s Lightning is about to be released and RIVIAN is hurting; Ford sells millions of their stock; Like it was planned to put Rivian out of business

Rivian R1T is a superior truck than the top F150 Lightning at about the same price

Ford Motor Company's market share ... from a high of 29.3 percent in 1961 to 14.6 percent in 2016. and 12.63% 2021.
Seems Ford has a tradition to keep up - or rather down - downward market share.

https://www.aei.org/carpe-diem/animated-chart-of-the-day-market-shares-of-us-auto-sales-1961-to-2016/

 

[MP3Mike]

I don’t understand why Ford would buy so much stock, knowing that Rivian was going to be its prime EV truck competitor?
Then right when Ford’s Lightning is about to be released and RIVIAN is hurting; Ford sells millions of their stock; Like it was planned to put Rivian out of business

They were originally going to partner on some vehicles, but that was canceled. Which is probably why they are selling now that the lockup period has passed.

 

[bkp_duke]

...I'm...not sure what you're getting at. Rivian just sold and produced the most cars its ever been able to this past quarter and has 100k back order for their products. How do you see the company struggling?

Because their spending is off the hook. Little indication of fiscal responsibility.

Each R1T produced is currently "costing" them over 250k. For comparison, during a similar phase for the Model S back in 2012/2013 Tesla was losing something like $20k on each one sold. And that is when batteries cost like 8X as much per kwh.

Rivian is spending like they are further up the S curve, but they are not.

 

[betstarship]

Because their spending is off the hook. Little indication of fiscal responsibility.

Each R1T produced is currently "costing" them over 250k. For comparison, during a similar phase for the Model S back in 2012/2013 Tesla was losing something like $20k on each one sold. And that is when batteries cost like 8X as much per kwh.

Rivian is spending like they are further up the S curve, but they are not.

I get that. Though, if they are directionally correct and have a set strategy that they're implementing with confidence (because from the fact that, as an outsider, they have scaled this product/service/organization up to this point and done it at high quality) and their earnings call was well-run and positive despite these financial issues, then they likely have back up in terms of additional financing available (theres quite a lot of weath waiting to be deployed worldwide) and/or potential acquisition to take on and continue the ramp to mitigate corporate and product risk to customers.

 

[Cosmacelf]

I get that. Though, if they are directionally correct and have a set strategy that they're implementing with confidence (because from the fact that, as an outsider, they have scaled this product/service/organization up to this point and done it at high quality) and their earnings call was well-run and positive despite these financial issues, then they likely have back up in terms of additional financing available (theres quite a lot of weath waiting to be deployed worldwide) and/or potential acquisition to take on and continue the ramp to mitigate corporate and product risk to customers.

I hate to sound like a TSLAQ back in the day, but Rivian has not proven it can actually produce vehicles at sufficient volume. Until they do, investing in Rivian is very risky. You are literally rolling the dice since even Rivian management doesn‘t know if they can. Same goes triple for Lucid.

 

[Cosmacelf]

They were originally going to partner on some vehicles, but that was canceled. Which is probably why they are selling now that the lockup period has passed.

It is interesting to look at Mercedes investment in Tesla versus Ford in Rivian. Mercedes/Tesla had an actual partnership with Tesla selling them a drivetrain/battery and Mercedes selling them various parts (like the steering wheel, driver stalk and other things). Both companies worked together for many years, learning from each other, and when Mercedes sold their stock, they made a lot of money and it didn’t affect the stock price one bit.

The Ford/Rivian relationship has been awful. They didn’t collaborate on anything and Ford decided to dump their stock as soon as they could, massively negatively affecting the stock price. I have got to chalk this up to another management error by Rivian.

 

[Doggydogworld]

It is interesting to look at Mercedes investment in Tesla versus Ford in Rivian. Mercedes/Tesla had an actual partnership with Tesla selling them a drivetrain/battery and Mercedes selling them various parts (like the steering wheel, driver stalk and other things). Both companies worked together for many years, learning from each other, and when Mercedes sold their stock, they made a lot of money and it didn’t affect the stock price one bit.

The Ford/Rivian relationship has been awful. They didn’t collaborate on anything and Ford decided to dump their stock as soon as they could, massively negatively affecting the stock price. I have got to chalk this up to another management error by Rivian.

There was some collaboration for a while. 10-Q says "The Company obtains prototyping, engineering, and other research and development (“R&D”) services from a wholly-owned subsidiary of Ford Motor Company (together with its affiliates, “Ford”), a principal shareholder of the Company."

IMHO this is about Jim Farley seeing EVs as the future. Farley's predecessors seemed to support EVs only because Chairman Bill Ford kept pushing them to. Farley became CEO in late 2020 and inherited the Rivian investment which had been made 18 months earlier. Since taking over he's tried to get management and employees to fully buy in, not do halfway/lip service measures like the Rivian deal.

 

[Msicario]

...I'm...not sure what you're getting at. Rivian just sold and produced the most cars its ever been able to this past quarter and has 100k back order for their products. How do you see the company struggling?

My question was; By Ford selling millions of Rivian shares/stocks at that particular time; Did it impact, devaluate or slow down Rivian at all?

Would GM or Chrysler buy millions of shares/stock from Ford? If so why?

I don’t see Rivian struggling at all as long as you have the likes of Mr. Bezos and Soros backing the company.. Georgia manufacturing plant will be a huge..

 

[Cosmacelf]

I don’t see Rivian struggling at all as long as you have the likes of Mr. Bezos and Soros backing the company.. Georgia manufacturing plant will be a huge..

As an investor, you have to be worried about Amazon dumping Rivian as soon as something better (cough, Ford, GM) comes along. As I recall, that 100K Amazon order isn’t firm. If Rivian keeps on dribbling out vehicles, Amazon could still dump them.

 

[Cosmacelf]

Rivian’s seat supplier for the Amazon vans doubled their contracted price after Rivian asked for a bunch of design changes. Rivian didn’t want to pay new price, Rivian sued to force supplier to keep supplying at contracted price. Sounds like a mess, and sounds like Rivian doesn’t have its act together.

Rivian Warns Dispute With Seat Supplier Threatens Production of Amazon Delivery Vans

The electric-vehicle startup said the pricing dispute could impact production of an electric van ordered by Amazon.

www.wsj.com

 

[Mengy]

Rivian’s seat supplier for the Amazon vans doubled their contracted price after Rivian asked for a bunch of design changes. Rivian didn’t want to pay new price, Rivian sued to force supplier to keep supplying at contracted price. Sounds like a mess, and sounds like Rivian doesn’t have its act together.

Rivian Warns Dispute With Seat Supplier Threatens Production of Amazon Delivery Vans

The electric-vehicle startup said the pricing dispute could impact production of an electric van ordered by Amazon.

www.wsj.com

Production is very hard, and vertical integration has many great advantages.

 

[Chunky Jr.]

Sandy Munro is doing a Rivian teardown...

 

[Cal1]

Watched this one and the next one below. Boy he really likes this truck! Engineering expertise aside Sandy is an avid off roader and was a huge Jeep enthusiast. He sold his jeep and kept the Rivian for his wife. He also bought one for a youtube teardown. Too bad I can't get by that small bed.

 

[zecar]

Rivian’s seat supplier for the Amazon vans doubled their contracted price after Rivian asked for a bunch of design changes. Rivian didn’t want to pay new price, Rivian sued to force supplier to keep supplying at contracted price. Sounds like a mess, and sounds like Rivian doesn’t have its act together.

Rivian negotiating with seating supplier following lawsuit

A spokesperson for Rivian said Commercial Vehicle Group has “continued to supply seats to Rivian” and that the two companies are “discussing a resolution" to a dispute that prompted litigation in March.

www.autonews.com

 

[Msicario]

Rivian negotiating with seating supplier following lawsuit

A spokesperson for Rivian said Commercial Vehicle Group has “continued to supply seats to Rivian” and that the two companies are “discussing a resolution" to a dispute that prompted litigation in March.

www.autonews.com