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All discussion of Rivian Automotive
- Thread starter RobStark
- Start date
mspohr
Well-Known Member
Increasing production will reduce costs. We'll see if they can do it this year.
Tesla lost $ on every car sold for quite a while. It takes a while to scale up to volume and figure out how to cut costs. Many new models lose $ for a while as well. Takes time to ammortize all your design, engineering and start up costs.
GM and Ford will use the current profits from their ICE vehicles to subsidize their transition to EVs.
Elon did the same. Used the profits and experience from their original Roadster to fund the development of Model S. Used profits from S to spin up Model X. Used those profits to develop the less expensive and mass market Model 3 and used that as a base for the Y.
In addition, Manufacturers will use the credibility they build up from constructing successful initial cars to borrow $ for ramping to scale and further development
Really nothing new here.
GM and Ford will use the current profits from their ICE vehicles to subsidize their transition to EVs.
Elon did the same. Used the profits and experience from their original Roadster to fund the development of Model S. Used profits from S to spin up Model X. Used those profits to develop the less expensive and mass market Model 3 and used that as a base for the Y.
In addition, Manufacturers will use the credibility they build up from constructing successful initial cars to borrow $ for ramping to scale and further development
Really nothing new here.
bkp_duke
Well-Known Member
Um, no. Tesla had positive Auto Gross Margins since essentially the release of the S. They "lost" money because they were investing so heavily in expanding production and R&D for new cars.
Rivian has negative Auto Gross Margins, and that's before R&D and capex for production expansions.
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Correct. And it isn't even close. Here's the yearly gross margins for Tesla, Rivian, and Lucid. People find fault with Elon Musk for any number of things, but anyone calling him a bad CEO is an idiot.
It would be cool to do this for Ford and GM (and they would also have significant negative gross margins, but probably not quite as bad as below), but neither company broke out those numbers for their EVs (although Ford is just now starting to, but it didn't for first year of EV deliveries).
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bkp_duke
Well-Known Member
Not a correction. I said from the Model S days onward, not the Roadster. I.e. mass-production cars only.
Both Rivian and Lucid had a bad case of running before walking. They were endowed with huge war chests of investor money, so they have decided to go big and spend it quickly. It isn't at all clear yet whether that was a wise strategy. Considering that the market is valuing Rivian at essentially $0, it is clear the stock market doesn't think so (Rivian's market cap is equal to its cash, more or less). Even after such breathtaking losses, Rivian is doubling down and building a second factory, even as they haven't fully ramped their first factory.
Look, I own a Rivian and hope they succeed, but my guess is that they'll either go bankrupt or be bought by someone else for pennies on the dollar since I have yet to see signs of intelligence from that company.
Rivian's strategic errors (IMHO):
Look, I own a Rivian and hope they succeed, but my guess is that they'll either go bankrupt or be bought by someone else for pennies on the dollar since I have yet to see signs of intelligence from that company.
Rivian's strategic errors (IMHO):
- Production design was horrible - it is a very expensive car to manufacture. Munro found the door panels to contain 100 screws! Lots of redundant metal under the hood. Tesla also had issues with their Roadster, Model S and Model Y cars in this area, but not as bad as Rivian's.
- They knew their costs and pricing weren't aligned well before their IPO, but chose to ignore it (we know this from an employee lawsuit), and only tried to raise pricing after the IPO. And then after a couple of days, backtracked, choosing to forgo about $18K per vehicle for the first 50,000 or so vehicles. This was the worse option as they got a PR black eye anyways and lost out on almost $1B in revenue. In contrast, Elon did the exact same thing for the Roadster, but didn't back down. Make a decision and stick to it.
- Their battery design sucks. They have a single cooling plate for two layers of batteries, one close to the road, one insulated close to the cabin. In various conditions, this results in the two layers being at different temperatures. It causes reduced winter charging speeds, and reduce regen in the winter.
- What's the strategic plus to building out a Rivian branded CCS network? I am still scratching my head about that one. They can't afford it, their build out is so slow and anemic that it doesn't move the needle, and now they've got a stranded asset as everyone moves to NACS.
- Spending money on a second factory when the first isn't even close to being fully utilized.
- Spending capital on a huge wind turbine. They don't seem to realize that the time will come when they don't have tons of cash to throw around. At best that wind turbine will break even in 6 years or so. Six years (probably 10) is a long time to forgo use of precious capital. Also, why are they wasting precious management time/skills on being a power company at a small scale? Installing solar panels is one thing, those look after themselves, wind turbines are much more complex. Note that even Tesla didn't spend money on solar panels until they had excess capital. Yeah, I know Rivian has excess capital NOW, but their trend makes it clear they won't in far less than 6 years.
- Wasting money on slick, soft focus feel good videos. You want tons of free PR, not creating your own PR that competes with free PR. Rivian should have spent their video budget on hiring more people to drum up PR.
mspohr
Well-Known Member
Good analysis.
I have a Rivian "reservation" for next year. I figure by that time we'll have a better idea of whether or not they will go "bankwupt".
They have a good cash cushion now but are burning it fast. They will need to raise more money and we'll see if Amazon or investors come through on that. The key indicator for me is if they can get their volume up and costs down so they don't lose money on each car. They predict this will happen next year... we'll see.
Curious how someone on the one year order wait list feels about the recent (6/17) emailed sales event? Basically come in pick any truck and drive home same day. Yet many are in line waiting? How is that smart consumer interest vs need fast cash now?
I don't think anyone in the US/Canada continues to wait long term on a quad motor large pack R1T, which is what they have at the sales event.
Small pack, max pack, dual motors and R1S SUV are the people that are waiting.
Many companies including ramped up Tesla have been in similar situations. Some configurations are ready for delivery while others are long wait.
Apparently Tesla is low on white plastic cows because getting a White Vegan Leather Model 3/Y is tough.
mspohr
Well-Known Member
I only placed my reservation a month or two ago. I want the dual motor (cheaper). Those are in short supply. I can wait. Just hope my 2000 Land Rover doesn't die.
Regarding the Rivian Adventure Network.
They can switch the connectors to NACS at any point in the future. Not a stranded asset.
The Rumor before they starting putting chargers into the ground was that they would fill in the gaps of existing CCS networks at State Parks and popular off-road/overlanding locations so you can actually do those things. I think this was brilliant.
What Rivian seems to be doing is replicating the Electrify America/Supercharger Network by placing chargers at malls. And at fast food hubs and big box stores near the highway. This seems like a waste of capital.
They can switch the connectors to NACS at any point in the future. Not a stranded asset.
The Rumor before they starting putting chargers into the ground was that they would fill in the gaps of existing CCS networks at State Parks and popular off-road/overlanding locations so you can actually do those things. I think this was brilliant.
What Rivian seems to be doing is replicating the Electrify America/Supercharger Network by placing chargers at malls. And at fast food hubs and big box stores near the highway. This seems like a waste of capital.
Yes, they are putting Rivian fast chargers sometimes blocks away from an EA site.
Whether Rivian will ever be able to use the Tesla Supercharger network remains a very open question. There is a lawsuit that Tesla launched against Rivian a couple of years ago, and it is still going strong. One of the complaints in the lawsuit is about appropriating company information relating to Tesla's Supercharger network.
Every time I bring up that lawsuit in other EV forums people bring up Apple suing Samsung for IP theft. They kept doing business on other matters and waging legal wars on others.
Tesla is claiming Rivian stole mundane things. Like the process of acquiring sites, permits, and specialist employees. And poaching large quantities of employees from the Supercharger department. Not core electrical/software engineering IP. Anyways "All patents are belong to you."
And denying Rivian application to join "NACS Coalition" could get the DoJ sniffing around for exercise of monopolistic power to restrain competition.
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mspohr
Well-Known Member
It appears that Rivian owners should be able to charge at Magic Docks or with a NACS to CCS adapter (do they exist?) just using the Tesla app. It doesn't seem like it would require any cooperation between Rivian and Tesla to set this up.
I agree that blocking Rivians might raise questions about their "open standard" and "restraining competition".
Nobody is saying that they won't let them use NACS, they can do that at any time. But access to the Supercharger network is separate from that.
If there wasn't any benefit for GM and Ford drivers in GM and Ford making a deal with Tesla they they wouldn't have done a deal. NACS is an open standard that anyone can use for free.
My understanding is that CCS cars can only charge at limited number of Magic Doc locations.
When GM/Ford release a CCS to NACS adapter next year the handshake to use at non-Magic Doc Supercharger will not work for non-GM non-Ford cars.
